The Leader Magazine

MAR 2017

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58 MARCH 2017 Coworking: what you need to know I n 2006, the Hat Factory and Citizen Space opened their doors in San Francisco and, in so doing, became two of the world's first coworking spaces 1 . A decade later there are some 11,000 coworking offices around the globe, and the movement shows no signs of slowing down. Just three years from now – by 2020 – it's estimated that the world's coworking spaces will number 26,000 and membership will more than triple to 3.8 million users 2 . Despite its impressive growth, coworking still represents less than 1 percent of global office space and will likely remain a sliver of the overall industry for years to come 3 . This dichotomy – in which coworking is both the hottest trend in commercial real estate (CRE) and a niche market – can present a dilemma for CRE executives. Is coworking something they should ignore or explore? That's what HOK set out to examine when it partnered with CoreNet Global's UK Chapter to produce Coworking: A Corporate Real Estate Perspective. The report (available online at the CoreNet Global Knowledge Center) takes a detailed look at the coworking phenomenon and the opportunities and challenges it poses to CRE leaders. Before getting too deep, though, it's worth taking a look at how coworking came into being. The coworking evolution Today nearly 80 percent of global knowledge workers report working remotely at least one day a week 4 . These professionals tend to think of their workplace as more than just the company office. It's also their home, the neighborhood coffee shop or the local library – anywhere the Wi-Fi is fast and the atmosphere congenial. Often, workers are also thinking of a "fourth place" beyond the office (first place), home (second place) or the local Starbucks or public space (third place). Fourth places can take on a variety of looks and feels. They range from serviced offices with executive suites and shared receptionist services to hacker and maker spaces that give DIYers the workshops and tools necessary to build product prototypes. Coworking spaces, by comparison, tend to feature open layouts where workers can mingle and collaborate at shared desks and lounges. A social element is key, with 71 percent of coworkers saying they appreciate interacting with other members and 71 percent reporting they like the community element of their coworking space. Leading providers of coworking offices include Australia-based Servcorp (with more than 131 virtual and shared offices located around the globe 5 ), Belgium- based Regus (operating 2,700 serviced offices in 106 countries 6 ) and WeWork, a New York-based startup that launched in 2010 and today has 100 centers on four continents 7 . In its earliest days, coworking appealed most to the huge pool of independent contractors and freelancers created in the wake of the Great Recession. These self-employed professionals needed an affordable and convenient place to office and network new job opportunities. Today, however, the balance has begun to tilt. Full-time employees now make up the majority of coworkers, according to industry publication Deskmag, with firms including KPMG, Delta Airlines and GE all having used coworking to house new hires or remote and traveling employees. Employers themselves have begun experimenting with creating their own shared spaces as a way to connect with customers and stimulate employees. In Sydney, for example, the National Australian Bank transformed its lobby into public coworking space that places potential customers inside company doors 8 . In Chicago's Lincoln Park neighborhood, State Farm's Next Door is a coffee shop that offers free coworking space in close proximity to the company's investment and insurance advisors 9 . AT&T's six Foundry™ Innovation Centers seek to connect the company with "cutting-edge innovators and technologies" that might one day deliver new products to its customers. At Google campuses in Seoul, Tel Aviv, Madrid, Sao Paulo, Warsaw and London, the tech giant offers community hubs for entrepreneurs to learn, share and launch startups. Online retailer Zappos, meanwhile, invites the public to share its corporate offices and other spaces in hopes of making its employees smarter, happier, more productive and more creative 10 . by Kay Sargent and Beate Mellwig

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