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September 2017 — Office Properties Quarterly — Page 23
Workplace Trends
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T he co-working movement
has arrived in Denver.
WeWork, Industry and Galva-
nize, some of the more well-
known names in the modern
co-working industry, announced
their arrival to Denver in 2015, 2013
and 2012, respectively. As interna-
tional investor interest, commer-
cial real estate development and
office-using employment growth
in Denver has prospered over the
current business cycle, the co-
working industry also has exploded.
There are over 35 different shared
office locations in Denver totaling
approximately 1 million square feet
as of July, according to a local news
source. In addition, multiple new
facilities are under development,
including Industrious and The GRID,
both of which are scheduled for
opening before the new year. These
totals more than triple reports on
the footprint of co-working com-
panies in Denver since the start of
2015.
But should tenants and commercial
real estate professionals expect this
prevalence of co-working options to
sustain – if not grow in significance
and inventory – through multiple
cycles? Some of the traits most com-
monly associated with these work-
places existed long before the term
“co-working” took shape in the busi-
ness world.
Short-term serviced office providers
first emerged in the U.S. in the 1960s,
with companies like OmniOffices,
Stratis Business Centers and the
still-active Regus existing long before
today’s co-working giants. Open and
bullpen-style office plans were pio-
neered by private media and tech
companies before
the year 2000.
The emphasis
on collaboration,
live-work-play and
specialized busi-
ness atmospheres
offered at today’s
co-working facili-
ties have undoubt-
edly brought new
opportunities for
entrepreneurs. In
the last few years
we’ve seen co-
working spaces emerge in Denver
specifically designed with female ten-
ants in mind, a sustainability-focused
space, and even a co-working space
that moonlights as a night club and
art gallery.Women in Kind, founded
by Virginia Santy and Melanie Ulle, is
a prime example of this burgeoning
revolution of co-working founded,
funded and designed by women for
women.
Co-working spaces are tremendous-
ly useful for tenants between leases
or required to have certain business
groups in close proximity to a specific
client. In addition to startups and
freelance professionals, we’ve seen
sizable companies assign teams to
co-working space to work on specific
projects that require separation from
the larger workforce or benefit from
the services and atmosphere offered
by co-working providers.
The question remains: Is co-work-
ing the best option for tenants seek-
ing a startup or collaborative work
space? Not necessarily. There are
benefits to business objectives and
negotiating ability that growing busi-
nesses lose or see diminished when
not taking up private space or utiliz-
ing the services of a tenant represen-
tation adviser.
For one, it’s vital for any growing
business to secure and retain propri-
ety information and top talent.While
the ability to frequently collaborate
with outside parties within a co-
working space can facilitate creativ-
ity and a rewarding work experience
for employees, feedback from clients
on the co-working experience often
focuses on concerns that competitors
can easily poach talent and intellec-
tual property.
Furthermore, when striving to
maintain a specific organizational
culture and values – something that
often is a top priority for a company
in a real estate transaction – outside
influences presented in a shared
space can be a challenge. Is it impos-
sible to achieve these business objec-
tives regarding talent retention, intel-
lectual security and corporate culture
at a co-working space? No. Neverthe-
less, these challenges are important
considerations businesses must
review when evaluating workplace
options.
There are costs when working with
a tenant adviser to secure space that
businesses avoid when going the
co-working route. However, a ten-
ant adviser provides a wide range of
services to clients leading up to and
after their client commits to a lease
that co-working tenants are unable
to take advantage of. These services
include workforce strategy analy-
sis to determine what location and
real estate decisions are required to
attract and retain top talent, reduce
operating costs and foster innovation.
They also serve as representation in
lease negotiations to leverage the cli-
ent’s position in the market for eco-
nomically favorable lease terms, con-
cessions and tenant improvements
agreed to be implemented by the
landlord.When represented by a ten-
ant adviser, the representative con-
stantly evaluates the client’s business,
industry and office market to identify
opportunities to scale for growth and
improve efficiency by negotiating for
lease restructure or expansion, or
subleasing excess space to another
business.
Looking forward, it’s hard to bet
against co-working facilities having
some kind of sustained role in the
Denver office market for years to
come. It will be the job of commer-
cial real estate professionals to help
growing companies eliminate the
gray area for when a business should
utilize a co-working facility and
when they should scale up to private
space.s
Ashley Elkin
Assistant director,
Savills Studley,
Denver
These challenges
are important
considerations
businesses must
review when
evaluating workplace
options.