By: Kirk Diamond, Executive Managing Director at Cushman & Wakefield
This article was originally exclusively published on Commercial Property Executive.
Coworking is playing an increasingly larger role in the commercial real estate sector – with a proliferation of owners and operators infiltrating the market. The U.S. inventory of coworking space currently totals more than 34 million square feet, and in Atlanta approximately 400,000 square feet of coworking space has been added since 2014, and more than half of that was delivered in 2017. Coworking in Atlanta experienced a significant increase last year with 230,032 square feet of new space coming online across seven locations.
Even corporate companies are getting into the coworking game, creating branded concepts that allow their employees another office space option. In Atlanta, for example, traffic and parking issues are an increasing concern for companies that choose to locate in the city’s top submarkets – Buckhead, Midtown and Downtown.
When the Interstate 85 bridge collapsed suddenly last year, SunTrust Bank, which has more than 10,000 employees in Atlanta, realized that its employees coming from outside the Perimeter would have a much more difficult time getting to work. Because of privacy concerns and firewalls, the company couldn’t allow its employees to work from a coffee shop or traditional coworking space that use public wi-fi. After polling employees about their location and proximity to the office, as well as how people wanted to work, the company had the idea to create its own coworking space to offer employees another solution to driving to the Downtown office.
Their solution was to create SunWorks, an internal SunTrust-branded, 6,200-square-foot coworking space, located in Metro Atlanta in Kennesaw. SunWorks offers all of the same privacy and access to SunTrust’s servers, but in a retail center that is more accessible and allows the company 16 parking spaces per 1,000 square feet. With a high concentration of employees spread out throughout Metro Atlanta, SunWorks allowed the company to address its employees needs but maintain security and the company culture.
More companies, especially ones that require a high level of security, are expected to follow in their footsteps and create their own branded co-working spaces in high traffic volume cities. In fact, WeWork offers build-out services for companies that don’t want to be locked into a long-term lease and are seeking the flexibility and amenities that come along with a co-working facility.
The broad spectrum of coworking facilities has really only started to be explored in recent years. What began as a short-term solution for small start-ups has expanded into the corporate world, saturating the entire office market. Will coworking become the new norm for office space? That remains to be seen. However, the ideas it has brought to the table – communal space, freedom to work in an variety of environments, even having beer on tap – are part of a larger shift in commercial real estate and the way that employees want to work.
The iPhone was first introduced to the market in 2007, and many companies have not signed a new office lease since then. With more people working from their phones and the freedom that allows, the impact on the workplace has only begun to be explored. We are only at the very beginning of a significant change in how companies and people use office space.
Kirk Diamond provides his clients with a proven track record of success representing some of the nation’s top corporations. His focus is on office brokerage tenant representation, multi-market representation, negotiation strategies, financial analysis and documentation management. Mr. Diamond’s expertise in these specific areas greatly enhances his clients’ ability to assess their needs while providing solutions that tie their real estate requirements to their overall business strategy.