While coworking spaces still only occupy a fraction of the total market, the industry’s continued growth is making a significant impact on the commercial real estate market in Boston and around the world.
In Boston, there are more than 30 different co-working spaces, spread across all parts of the city.
Many, such as Workbar, TechHub, and Koa Labs, are located in Cambridge and Somerville – which have consistently catered to the startup community. Other coworking operations, such as Idea Space, LearnLaunch, Business District and WeWork – the largest global player in the space – have offices downtown.
WeWork opened its fourth Boston office at 31 St. James Avenue, in addition to its Fort Point, South Station, and Cambridge locations – comprising a total of 215,000 SF of space across different sections of the city.
Dave McLaughlin, WeWork’s General Manager for the Eastern U.S. region, calls Boston one of WeWork’s most vibrant cities, with a diverse and exciting culture creating a positive sense of community.
“It is one of our most popular cities, and we continue to see a broad range of companies joining and contributing to our community,” says McLaughlin. “It’s a magnet for well-established corporations in areas like insurance, education, and biotech, and is full of recent grads from world-class institutions such as Harvard, MIT, Tufts, Northeastern and more than 100 other colleges.”
Globally, industry studies have estimated there will be more than a million coworking members by the end of 2017.
Coworking began with a focus on smaller startup companies which needed functional office space in an easily accessible location without a longer-term lease commitment.
While in many ways the industry is still seen through that incubator-type lens, the model has also evolved to serve larger clients as well, where their flexibility is key.
Corporate enterprise-level tenants are turning to coworking providers to test new geographic markets, provide swing space as other real estate is built out, or even to provide dedicated conference and office space for travelling employees.
In some viewpoints, the “office-as-a-service” model also allows companies to shift their real estate costs from a capital expense to an operating expense, which has its own benefits for a company’s bottom line.
In addition to the practical reasons for office space, the collaborative environment and networking aspects of these types of arrangements are also resonating with users – both professionally and socially.
Emergent Research found almost 90 percent of members met up with colleagues socially and often turn to them for guidance, while more than 80 percent said co-working made them happier and less lonely.
The close proximity companies have to each other can also create mutually beneficial relationships. For example, a smaller four-person company may not have a notary public or lawyer on staff, but with so many companies in close proximity, they may be able to quickly find one down the hall.
The industry’s continued maturation has been buoyed by the continued shift of companies toward more freelance and “gig” workers instead of full-time salaried employees. During the past two decades, the number of independent contractors nationwide has grown 27 percent faster than payroll employee counts. In Boston, that trend has been even more pronounced, with the number of gig employees jumped almost doubled from 2012 to 2014 – which ranked 8th of all major metros nationwide.