Commercial real estate companies, coworking companies join forces
Commercial real estate company Cushman & Wakefield is betting that a solution to the problem of too many vacant office spaces is coworking. The brokerage said on Monday that it will partner with WeWork and plans to invest $ 150 million in the coworking company before its second try in an initial takeover bid.
It’s a relatively small bet, but it follows similar deals in the coworking industry made by office space giants like CBRE and Newmark.
What does all of this mean for homeowners, tenants and endangered species formerly known as the office worker?
With the current surplus of space, just take a look at the deal you can get on a sublet in New York City, said Alex Cohen, a commercial real estate broker.
“You could pay 50% of what a tenant pays,” Cohen said.
An option for owners who are trying to cope with the difficult market: the lease to a coworking company. If they are trustworthy, that is. “They have a reputation for being a very risky proposition in light of the past three years,” he said.
Some coworking companies have gone bankrupt or tried to terminate leases prematurely. Traditional real estate brokerages can give credibility to coworking businesses by setting themselves up.
But the main reason behind these agreements? Businesses looking for office space aren’t looking for long-term commitments, said Cali Yost, hybrid workforce consultant.
“Instead of investing in long-term leases in satellite locations, they will have more flexibility in the coworking spaces around this head office,” Yost said.
Whether or not they choose the coworking route, building owners are desperate to make the office look less like a place you need to go than a place you want to go.
“You see owners adding restaurants, adding gyms,” Cohen said.
A gym could be tantalizing. After all, it’s an excuse to keep wearing basketball shorts during the work day.