Will WeWork Conquer The Real Estate Market?
Actually, WeWork wants to do more than just conquer the real estate market. The ambitious plans for this rapidly growing company includes expanding into residential real estate, high end fitness, and even education. A recent NY Times article describes the enthusiastic goals of WeWork’s founder. On
By capturing the imagination of entrepreneurial as well as Fortune 500 companies, and fulfilling the desires of how millennials view the work environment, WeWork appears to have revolutionized how we work. Rather than occupying staid, plain, vanilla office buildings, at WeWork, employers now have the option to lease flexible, fun and creative work environments with chic decor, with many amenities, where their employees enjoy working, never have to leave the office, and are inspired as a result.
The WeWork concept includes flexible lease terms, comfortable, and creative spaces where the theme of the decor and amenities may change depending upon the location. WeWork offers facilities in hip downtown locations around the world including 303 locations in 62 cities. Amenities include free flowing beer, piped in music, fitness facilities, social networking venues and more. An elementary school and wave pool for inland surfing are other concepts currently being developed.
But will WeWork succeed in becoming a game-changer in how we lease space? While WeWork definitely serves a niche – and a growing one at that – there will always be a place for more traditional space alternatives. As an example, for now it appears that WeWork does not aspire to penetrate suburban areas. Leave other experienced real estate developers that are increasingly adding their own amenities to office parks for that. There will also continue to be a role for traditional landlords in downtown markets. For example, law firms, insurance companies and financial service companies that occupy large blocks of space for a lengthy period of time will need their own corporate identity, perhaps their own office tower, and with their own unique corporate image. As companies see the expanding trend of younger talent seeking employment in urban environments, this fast growing company is quickly becoming an 800 pound gorilla to contend with in downtown markets.
Not to be outdone, many upstart co-work facilities have also been expanding in downtown areas. Knotel in New York, the Cambridge Innovation Center, WorkBar and others in Boston are seeking to disrupt how we use space. Given this trend, we should be cognizant of the possibility of over saturation of the co-work concept.
Is the co-work concept right for your business? Contact me to further discuss this and to review your specific space requirements to find the best solution to your commercial real estate requirements.
Warren Brown, President, Boston Commercial Properties, Inc.