Why Now is the Perfect Time to Invest in 2018’s Fastest Growing Commercial Real Estate Trend
Many Americans are ditching their cubicles and trading in their office desks to become their own boss. Approximately 33% of working America is now self-employed. Self-employment tempts with the prospect of earning more money and the promise of greater flexibility and autonomy. But the rise in self-employment also has a dark side. 40% of self-employed people report that they have struggled with loneliness and isolation since leaving their 9-5. The creeping loneliness of working from home has led many entrepreneurs to seek out communal work spaces, commonly known as coworking spaces. Coworking spaces are shared work environments where the self-employed can build connections, network, and grow their own supportive communities.
Since the first coworking space was opened in 1995, by C-base, the trend towards coworking is not slowing down. Currently, there are around 14,000 coworking spaces worldwide. The number of people using coworking spaces is also on the rise: by 2018, it’s predicted that one million people around the globe will be working from a coworking space.
While coworking spaces have traditionally been used as a hub of creativity and collaboration for start-ups and small business owners, companies across different industries are also beginning to see the benefits of investing in this type of shared workspace. NUMA, France’s first collaborative workspace, now works with 30 large businesses to help grow new start-ups. The tech-giant Microsoft also allows 30% of their employees to use WeWork coworking spaces around New York.
While coworking spaces are still only a small percentage of office space in America, in the previous two years coworking space leases accounted for approximately one-quarter of signed leases. With the interest in coworking spaces, both from the self-employed workforce and from larger organizations, set to continue, now may be the best time for a commercial real estate investor to consider acquiring a coworking space.
How to Ensure Your Coworking Space is a Wise Commercial Real Estate Investment
If you think that a coworking space could potentially be a smart commercial property investment, you need to carefully consider a few important factors before you invest in your commercial property.
A recent survey from Global Workspace found that the key thing that coworking space users look for is an office space that is easy to get to. As such, the best place for your commercial investment is in a central urban environment that boasts strong transportation links. As Global Space note, 80% of coworking members will live within a 30-minute radius of their space. As such, it’s important to take the time to research the number of business owners, remote employees, and freelancers living nearby a potential commercial property for rent.
When looking for the ideal coworking space to invest in, be wary of your competition. With the rise of coworking spaces in cosmopolitan cities, it’s more important than ever to ensure that you choose a location that is not already bustling with a number of coworking choices.
The rise in popularity of coworking spaces also means that real estate investors must be careful in selecting ownership in order to ensure that their spaces continue to turn over a profit. Morris Levy, who co-founded the popular New York coworking space The Yard, also stresses that commercial real estate investors should ensure that ownership will invest in a welcoming and collaborative environment.
Levy notes, “People with laptop and cell (phones) can work from anywhere, but a lot of people want to go to co-working spaces so they can be inspired by other people in other businesses.”
How to Source Coworking Spaces as a Commercial Real Estate Investor
There are several ways to source the ideal spot for your coworking space. You can use listing platforms to search for office space currently for sale in your area. LoopNet, CityFeet, and OfficeSpace all offer listings.
In contrast to focusing your search on office spaces currently for sale, there are several benefits to sourcing off-market properties. One benefit is that your search will be widened exponentially to include several attractive commercial real estate investments hidden from your competitors. Refining your search to focus on off-market properties also means that you may be one of the only investors to contact a property owner.
Reonomy can also help you source valuable off-market commercial real estate properties. Covering 99% of America’s CRE market, Reonomy pools up-to-the-minute marketplace data – allowing you to search from millions of eligible potential real estate investments.
Using Reonomy’s unique filters, you can find a golden commercial property investment that you might miss otherwise. You can refine your search based on several key characteristics: the sales history filter can help you predict if an office space or potential coworking space may soon be up for sale. Similarly, debt history can also signify if a property owner may be likely to place a property back on the market.
As we noted above, location is everything when it comes to settling on a profitable coworking space. Reonomy allows you to search for properties in your desired location using our radius search. Radius search allows you to draw on a map of the local area, which will generate results on the different properties in your desired range.
Our asset type filter is also useful if you’re looking to narrow down your search to office spaces. You can also use Reonomy to search for properties based on property owners. We also take the headache out of having to track down an owner’s contact information by providing you with contact details, including a phone number.
If you’d like to find out more about how to use our search tool to find potential off-market commercial property investments, check out this article. If you’d like to start your hunt for the perfect coworking space, then why not head straight to our tool and begin your search?