CREJ

T here’s no question that cowork- ing and other flexible office solutions are fundamentally changing global commercial real estate markets.The phe- nomenon’s footprint has exploded fivefold since its earliest days around 2010. Illustrative of the degree to which it is thriving, it accounted for nearly two-thirds of all U.S. office absorption last year alone.The industry touts its appealing selling points well, asking office occupiers, “What’s not to like about our offerings?” Users do, in fact, continue to demand easily digest- ible, flexible and cost-effective office options. Additionally, they do prefer the often- offered access to shared amenities (think: conferenc- ing, coffee and food, shared workspaces, yoga, and nap and wellness rooms, among other fea- tures). Another perk?Tenants don’t only seek out sim- pler, more flexible officing options; rather, many estab- lished occupiers utilize proximate coworking space for growth before deter- mining long-term occupancy. Opera- tors likeWeWork, Spaces, Industrious Office, Serendipity Labs and a plethora of others are all rapidly expanding throughout many domestic markets. Still, as with any industry growing exponentially, doubts have emerged, and many people are questioning if this sector will prove sustainable and whether markets are becoming saturated. Though the industry’s ramp-up has seemed extraordinary, flexible space (which we define to include cowork- ing, custom headquarters, incubators and other short-term lease models) comprised only slightly less than 5% Please see Page 20 June 2019 INSIDE Market updates PAGES 4-8 Tenant expectations PAGE 16 River North spotlight PAGE 12 Looking beyond the central business district, many opportunities exist in Denver’s suburbs Staying on top of changing office tenant expectations is critical for successful projects Developers must overcome transportation and amenity challenges for projects in this hot area TJ Jaroszewski Research director, Rocky Mountain region, JLL Flexible workspaces are no longer a future concept Mandy Seyfried Senior research analyst, JLL Novel Coworking Coworking and flexible-space businesses, including Novel Coworking, occupy approximately 2 percent of Denver’s entire office market. The overall footprint for these operators has surged 8.2 times since 2015.