Opinion: Real Estate Experts See Reasons Behind Coworking Growth

The following op-ed was written by Greg Reilly.

The expansion of coworking facilities locally, in Fairfield County and around the country is due to a growing expectation of flexibility and convenience in all aspects of life, a general uncertainty about the future, and structural changes in today’s workforce, according to commercial real estate experts.

The growth in coworking, where unrelated companies and work groups share building space and a variety of technical and administrative services, is clear and continuing. In the U.S. alone the number of coworking spaces is expected to reach 5,900 by 2021, a 47 percent increase in just five years. Locally, coworking facilities have been popping up in Darien, Stamford and Norwalk. Cushman & Wakefield’s 2018 Coworking Report shows that, while coworking offices were only 1 percent of total commercial office space in 2017, they are expected that to triple and rise to between 5 percent and 10 percent of inventory in many markets.

Cushman & Wakefield, among the largest commercial real estate services firms and a leader in Fairfield County, says the growth goes hand in hand with the technology adv­­ances that have led people to expect flexibility and convenience in almost all aspects of their lives.

“The smart phone, the internet, transportation options, and the sheer range of offerings in retail enable us to have more flexibility than ever before,” the company states in its 2018 report. “This is now extending to the lives of millions of office workers as well …. The fundamental concept of coworking is simple and ingenious: create accessible, fully fitted out, communal office space on short-term leases.” ­

Beyond technology

Llew Smith, founder and managing partner of Office Suites of Darien, has been in the coworking market here for 19 years, and he says there is a general sense of uncertainly about business and the economy that is leading more companies to seek flex office space rather than traditional longer term real estate leases.

“The world is less predictable,” said Smith. “State and national politics, disruptive technology, new types of businesses, and generally less comfort about the future,” are all contributing factors.

The changing makeup of the workforce is another reason cited in Cushman & Wakefield’s report, which says freelance and contract workers have increased from 10 percent of the total national workforce in 2005 to 17 percent in 2015. Forbes.com reported in late 2018 that independent freelancers are approaching 30 percent of the workforce.

On top of all the economic and business reasons, Smith said he finds also that with the growing expectation of more convenience in life, many executives are choosing to have a hometown office, outside of the home, so they can be close to kids’ after-school activities and have a chance to beat the traffic on Fridays when heading to the mountains or beaches.