Earth isn’t About to Become One Big Coworking Community
If you surf the interwebs as much as I do in search of content related to corporate real estate, technology and workplace trends it isn’t much of a challenge these days to come across articles regarding the coworking trend. Earlier this evening I came across three separate related articles.
- Coworking: A window into the future of work
- By 2020, independent workers will be the majority
- Coworking operators as expert community managers
Let me first state, I acknowledge without question that coworking is a growing trend and I am not challenging the premise that the corporate enterprise will begin to experiment with coworking arrangements for at least some of their employees. I also do not dispute the growing number of independent workers. However, it was a subtitle, “Empty office towers everywhere” in the third referenced article that prompted me to write this post.
So let me ask you a question, ” If you have bunch of glasses of water 85% full, are there empty glasses of water everywhere?” In fairness, this particular article was referring to the European office market and that subtitle really wasn’t the main premise of the article. However, given the state of the economic environment in Europe, I would speculate that the increased office vacancy as compared to past historical levels has more to do with the worst global recession in recent history than the pace of corporate space users trimming their real estate footprints. Again to be clear, I am not challenging the premise that corporations are looking for more efficiency with their office space.
Whenever I read some article implying the impending death of traditional office space I can usually count on the fact it has been authored by someone from within the coworking industry or a technology company whose products support the mobile working environment. Turning the focus back to the States, I acknowledge that in certain larger cities that coworking operations are growing in popularity. I also know that being profitable is challenging for many. Looking at my local market in Houston without the benefit of hard data there can not be more than 20,000 square feet of coworking space in an office market that exceeds 200 million square feet. Furthermore, I have observed more than one coworking operation fail. The idea that we are at the onset of a massive shift from traditional office space to coworking arrangements is as insidious as me denying any existing trend of corporate space users trimming their real estate footprints. I equally challenge the premise that the population of independent workers is going to increase from 16 million to 70 million in 8 years. The idea that it might double in this time frame seems a bit more realistic. I also don’t believe that millennials are marching into the C-suite and telling senior management how to layout the office or the terms of their working arrangements. I don’t need to remind you of the current unemployment rate whose recent modest improvement is more about people dropping out of the workforce than job growth.
I do understand the need to market your industry and yes, the work environment is changing for many reasons but can we stop the hype and be a little more realistic. I liken this to some of the economic headlines I read, particularly from a few in the commercial real estate industry or your local business journal who from the attention grabbing headlines would have you think we are in the midst of a strong economic recovery. I think we all wish it was the truth but we know it is not reality.
Here is my prediction, when the economic recovery becomes more robust then we will see more coworking space arrive in the marketplace and be financially viable. In addition all those so called “empty office towers everywhere” will be full as well. The office tenant’s actual space may more closely resemble the coworking space of today, but it will still be their space.