Co-working office models arechanging office financing, and not necessarily by choice. Thepopularity of co-working and flexible office leasing has forcedlenders to develop new underwriting standards for these businesses.In some instances, co-working platforms, and the often householdname clientele they attract, has a better credit than many smallerdirect-lessees, and that can create a halo effect for officeproperties with co-working tenants.

“The way that buildings are financed is starting to change. Caprates on office properties with co-working have a halo effectbecause that cash flow from a co-working operator is seen as highquality,” John Arenas, chairman and CEO ofSerendipity Labs, tellsGlobeSt.com. “It is a totally different situation than it was yearsago.”

A big part of that is the quality of the brand's members.Co-working companies like Serendipity Labs aren't only servingstart-ups that can't get into or afford an office space. They areserving employees and project teams from major corporations. “Ithink that co-working operators are aggregating better credit thanmost small leases that a landlord would sign,” says Arenas. “If wehave American Express and Netflix at a location, that creditquality is much better than a small law firm tenant than a landlordis going to sign in the building. That is the big picture of whatis really shifting.”