Co-working is rapidly redefining the office work environment. This trend has been quickly gaining steam in recent years, but many people have been left wondering what all the hype is about. What exactly is co-working, and what’s driving this transformation?
An Overview on Co-Working
One official definition of co-working is “the use of an office or other working environment by people who are self-employed or working for different employers, typically so as to share equipment, ideas, and knowledge.”
In simple terms, the need for flexibility, design and connectivity is driving demand for alternative workspace such as co-working worldwide—and that includes Cleveland.
Originally, co-working spaces were primarily geared towards freelancers, remote workers and startups. But today, co-working facilities provide various types of workers with shared offices and workspaces through flexible-term leases—including small businesses and corporations.
Each of these distinct groups has unique needs in a co-working space, and utilizes the workspace in a different way. But one thing remains true across the board: demand is growing quickly, and it’s not slowing down.
What began as just over 1,000 co-working sites globally in 2011 has exploded into more than 18,000 sites today, totaling an estimated 2.3 million co-working members. This market is expected to grow 15 percent within the next several years.
Cleveland’s Co-Working Market
Here in greater Cleveland, our market has reflected the early trends of co-working, with individuals and smaller enterprises making up the majority of users. But that’s not going to be the case for very much longer.
Recently, the Cleveland Urban Land Institute hosted a panel on CSU’s latest study on the impact of co-working, Disruptive Growth Through Co-Working Industry. This study explores the global success of the trend, as well as predictions for the future of co-working in Cleveland. The results are fascinating, to say the least!
Through interviews with local co-working providers and demand models based on national occupational data, the research team has estimated demand for co-working in Cleveland to be over 26,000 workers. This figure represents self-employed workers, freelancers, corporate employees, teleworkers and business travelers, and is expected to increase over time.
Currently, the Cleveland co-working market is undersupplied due to site availability, especially in terms of spaces that cater to corporations rather than entrepreneurs and small businesses. Much of this supply shortage is related to the limited availability of Class A office space and price per square foot.
The Economic Impact of Co-Working
In the coming years, it will be important for Cleveland to increase the number of co-working spaces in order to keep up with the rapidly growing demand. This will likely mean expanding outside of downtown and finding new pockets of young, creative talent to populate the workspaces.
These various increases to meet demand could result in hundreds of additional jobs in Cleveland per year, and up to $125.7 million in labor income over the span of eleven years.
It would also positively position Cleveland against a number of competing regions; if enough additional co-working spaces were created to meet just one-third of future demand, the region will be comparable to the Denver-Aurora-Lakewood MSA. If the supply could meet two-thirds of that demand, it will compare with the San Francisco-Oakland-Hayward MSA.
Cushman & Wakefield | CRESCO is working with investors and developers to chase the demand and expand the availability needed to accelerate growth in our region. It’s all about creating options and opportunities, and is an exciting part of what’s next in real estate.
To learn more about how CRESCO, Greater Cleveland’s leading commercial real estate company, can help you with your property needs, contact us at 216.520.1200, or fill out the form below. A CRESCO professional will contact you shortly.