The general shift in workplace trends, technology advancements, and employer mindsets are driving a unique distribution of remote workers and freelancers in the workforce. With increasing adoption of flexible work options and changing approaches to corporate work styles, the result has been an increase in opportunities to provide flexible office space.
While market growth and opportunity is not a new topic of discussion, the implications of new players entering the shared office market are becoming increasingly real and are having a greater impact on smaller, long-time flexible workspace operators. We’re operating in a $22 billion global market. In the U.S. alone, the Coworking industry is composed of 27 million square feet. While there may be enough workspace to go around in a booming market with increased demand, it’s smart for operators to take note of how these shifts will impact them in the long-haul.
New Market Players
Former late-comers to the party, such as Commercial Real Estate players have finally woken up to smell the roses. After a sluggish entrance to the market, they realize the opportunity and are trying to get a piece of the pie. More than anything, they are now cognizant that they must adjust their own models to match the way businesses want to be run. Traditionally, commercial real estate was highly transactional and laser-focused on profit generation. This meant they weren’t necessarily aligning their offerings to the needs of the tenants. Now, with the paradigm-shifting trends pushing SMBs and corporates to opt for Coworking spaces, they’ve had to readjust their approach to the market and factor in new business models.
In the same way that small to medium sized businesses have sought flex space in shared and serviced offices, larger corporate organizations are beginning to seek turnkey office solutions, both on a local and global level. They want to remove the costs and recurring overhead associated with seeking and managing a new space and fit-out, long-term lease burdens, and even facilities and amenities provisioning.
Smaller operators are at an advantage in that they are able to be more agile and flexible to accommodate the new and dynamic needs of shared workspace seekers and the new generation of workers. They’ve also been playing the game longer and have integrated a level of hospitality that the traditional CRE approach lacks.
Delivering Your Proposition
The added layer of CRE competition to the shared workspace market gives operators across the board a chance to reevaluate their proposition and differentiate their brand and services to retain and attract new customers. Perhaps defining your niche – tech, media, law, accounting, etc. – or extending a layer of additional services and amenities to customers will do the trick.
The consensus among successful operators is that delivering outstanding member experience and unmatchable quality of service, from Internet and Wi-Fi to cafe services, can make all the difference. It’s not exclusively about having the services available, but about execution and delivery of services promised to your customers.
Smaller operators, not backed by any investment or large-funded CRE companies will do good to keep a sharp on the reports and numbers that can help them run a slicker operation – from services to budget management. Read more about the metrics you need to run a workspace.