The coworking industry has seen unprecedented growth the past few years, enjoying rapid expansion across some of America's most economically valuable cities. In fact, according to Deskmag, the number of coworking locations has also grown globally from 1,130 spaces in 2011 to 13,800 in 2017. With the rising prominence of the market, companies that take advantage of coworking have seen major benefits to their business—outsourced office management, seamless entry into new markets, gorgeous design, and well-maintained and flexible work environments.

While companies of all sizes — from start-ups to enterprises — are taking advantage of the coworking movement, there are other stakeholders that stand to benefit from the coworking boom—both landlords and property managers. Some of the most prominent landlords and property managers in the world have begun to invest in the coworking industry.

There are three specific and palpable reasons why:

Technology Innovation is Now a Built-In Expectation

The first significant advantage for landlords is the ability to provide its tenants with the latest technology and innovation that coworking offers. From virtual doormen and smart conference rooms, to meditation spaces and remote check-ins, there is a growing expectation that buildings offer access to the latest technological advances. With all of the other current challenges to maintaining a building, keeping up with shifts in innovation isn't always the priority.

Those priorities may be changing. A growing number of workers want the benefits of technology integrated into their workspaces in order to operate more efficiently and provide more flexible work environments. In fact, a recent Dell and Intel study showed that globally, 57% of people expect to be working in a smart office within the next five years.

That's where coworking comes in. The ability for a landlord to partner with a coworking platform allows them to work directly with an expert to keep their office building up-to-date on the technology front, lending to a higher competitive advantage.

Better Offices, Better Build-Outs, Higher Property Values

Gone are the days when a company could simply move desks and chairs into a space and call it an office. Contemporary interior design is a core consideration for any company looking to create a productive environment for its employees. More than that, it's standard practice for landlords to increase building amenities in order to raise building value significantly.

As people spend more time at work, companies require space that is designed efficiently for many different personality types and work styles. That's a big job for a property manager to take on. Through coworking, landlords can essentially outsource their interior design needs, giving their tenants beautiful spaces and amenities they may not have access to with a typical lease.

Plus, when a company grows and needs more office space, the first place they're going to look is in the building they already occupy. If building management has a standard build out already in place, there is a greater likelihood the current tenant expands within the building, resulting in lower turnover and upgrade costs for landlords.

Cross country expansion, Minus the U-haul

One of the best and most frequent uses for coworking spaces is rapidly expanding businesses in need of remote offices, satellite locations or short-term work space. If a landlord creates a partnership with a coworking platform, the potential exists to grow its relationship with its tenants beyond a single lease, especially if the property management group has multiple locations.

The coworking company is incentivised to fill the space so landlords will never need to worry about an empty office floor. With more and more companies looking at coworking as an option – 1.7 million people are projected to work in coworking spaces by the end of 2018 — these partnerships could lend themselves to a much greater beneficial relationship. In short, the pay off doesn't have to stop at one lease signing.

Coworking produces more revenue and higher net operating income than traditional market leases do for a similar amount of space. Increasingly, providers and landlords are partnering to share in the upside. Landlord partners have seen increased property values, better tenant retention and better building credibility due to working coworking partners.

What was once considered a fad is proving itself to be a permanent solution for many growing companies. While these businesses and their employees reap the benefits, landlords and property managers can also capitalize on this growing industry.

Jamie Hodari is the CEO of Industrious, a coworking giant that just raised $80 million. The views expressed here are the author's own.

Instant Insights /

Why Landlords and Property Managers Can Benefit From the Coworking Boom

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