Shared office spaces, or co-sharing offices, are all the rage these days.
We’ve known for a while that coffee shops like Starbucks are a big hit with bootstrapping startups, but the rise of companies like Regus, Boston-based Workbar, and the a recent report that WeWork, an office rental company, is being valued at $16 billion, more and more established commercial real estate (CRE) companies are starting to take notice.
And they should, because both traditional CRE companies and up-and-coming companies like WeWork are after the same thing: happier, more productive tenants.
But it begs the question: what makes a tenant a happy tenant?
If our Tenant Relationship Management Benchmark Report is any indicator, tenant happiness is primarily driven by comfort. And these new shared office spaces, packed with amenities like bookable conference rooms, uniquely themed common rooms complete with comfy furniture, outdoor patios, snacks, and even game rooms, absolutely scream comfort.
“This is all well and good,” you might say. “But how can I know whether my tenants (and tenant prospects) are lusting after these types of comforts and amenities?”
Well, as usual, the answer is complicated and potentially open-ended.
We know that tenant satisfaction and needs are critical to lease signings and renewals, but most co-sharing offices don’t require traditional leases. It’s difficult to say whether tenant companies would buy into a longer-term lease if the amenities were there, seeing as most co-sharing tenants utilize their space on a temporary, short-term basis.
But you could start to answer these questions by utilizing your best resource – your existing tenants!
Gathering Tenant-to-Space Relationship Insights
In the recently released ‘Americas Occupier Survey,’ published by CBRE, it was reported that 46% of polled CRE Executives “are using or considering shared workspaces,” and that 57% “see (tenant) employee attraction and retention as driving workplace strategy.”
That’s a pretty high number, considering the fact that in the very same report it was stated that while co-sharing offices are a hot commodity, interest in them is not uniform from industry to industry.
So how can you determine whether your tenants (and prospects) are interested?
- Identify your tenant types
- Consider your property location
- Think about your tenant’s employee demographic
- Factor in tenant service delivery satisfaction history
- Most importantly: Talk to them!
The most important thing to prepare for, much like the process for adopting new CRE Tech, is the buy-in and adoption factor.
The Tenant Buy-in / Adoption Factor
If you can’t communicate the benefits of a space (shared office or not), then no amount of building amenities or comforts can help you. You need to be able to know the tenant (or tenant prospect) and directly hit their problem areas.
So is it worth it to try to utilize shared office spaces on your property? Possibly!
(Though admittedly, I am no CRE Executive.) It seems logical that the earlier you start building a tenant relationship, the better the chance that you’ll get their long-term business when they start making it big.
Sure, not all office co-sharing tenants will turn into long-term contracts, but with a little bit of research, and deep conversations looking into their needs, you may discover that it is worth the investment.