I wasn’t exactly certain what Seth and I were going to talk about for this week’s Conversations from the Corner Office, but one thing was for sure – I hadn’t planned on bringing my 10-year-old along for our meeting. Alas, with school starting in a few days and no child care, I didn’t have much of a choice, so I packed up her and her iPad and headed to the office.
As she sat on the floor playing happily on her tablet while Seth and I were busy “adulting,” I had a flashback to going to the office with my dad and being bored out of my mind. When I got tired of the coloring book I’d brought along, there was no quick solution. I’d have to convince him to get in the car, drive me to the store, wait for me to pick out a new book, and then stand in line to buy it. Now, if my daughter gets bored with the games she has, all she needs to do is hit the app store, find one she wants, and it’s downloaded to her iPad in seconds. Lucky kid!
When I mentioned that to Seth, it immediately became clear what we’d discuss this week – technology, and how what used to take weeks or months (or, in my case, a lot of begging) can now be accomplished much, much faster.
Now, that’s a pretty broad topic so we drilled down a little further to apply it to the world of commercial real estate and “PropTech,” which is something we’ve been hearing about a lot lately.
PropTech is defined as technology aimed at the real estate industry that’s positioned to change the way we buy, sell, and manage property. I’d been doing some reading on the subject and one common theme I noticed was the rapid growth of coworking spaces. I wanted to understand a little bit more about this trend and why it’s becoming so popular, so I turned to Seth for answers:
SG: From what we’re seeing, it seems a lot of large companies are decentralizing their headquarters but at the same time, they want to start providing a much larger national footprint. By renting out coworking spaces in different cities, it gives these companies a chance to hire local people. They don’t have to relocate to a different city or work remotely, and having them in a coworking space gives them the support and interaction they need to be successful.
SG: Quite simply, you can fill vacancies faster. The leasing process for more traditional office space can take several weeks to a year – leasing a coworking space can be done in minutes. Plus, because they can slice up rent into little pieces, they’ll get a higher net rent rate. Basically, the owner is maximizing their rent by using the speed of technology versus going to the traditional route.
SG: Look at Lord & Taylor [its flagship store in Manhattan was sold to WeWork last year for $850 million]. It’s a massive opportunity for vacant big box stores to convert to coworking space in urban and community environments, and PropTech is allowing it to take place in a faster, more meaningful way.
SG: You get the human component, which you don’t get when you’re working remotely. In coworking spaces, teams can work and learn from what other companies are doing and it increases the speed of communication among industries. From a sales standpoint, it creates the potential to build deep networking relationships with other salespeople, and can also create a friendly competitive nature – you see what the person next to you is doing, and it makes you want to be better. Plus, coworking spaces further innovation. You can learn about the technologies that other companies are using and maybe find out about tools you didn’t even know existed. Learning can go up the food chain.
I think you’re definitely going to see this trend continue, not only in big box stores but also in smaller environments. There will be more amenities like wellness centers and partnerships with retailers [J Crew has partnered with WeWork to create pop-up shops at locations across the country]. Basically, they’re going to be like mini corporate office spaces but with lots of different types of businesses represented. There are plenty of opportunities for everyone!
Now we’d like to hear from you. What do you think the future of coworking spaces will look like?
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