TailoredSpace was recently featured in Western Real Estate Business for its coworking and office space rentals! We’ve provided an excerpt from their article below:
CREDIT: DREW SANDEN, WESTERN REAL ESTATE BUSINESS, 10/24/2023
Well before the onset of the pandemic, the office environinent was changing. The pandemic then accelerated how we view office space a worker d iscov ered the convenience of working from home, while office users realized they could execute smaller leases by adopting hybrid workplace strategies.
The result? Low occupancy rates for office buildings. This left landlords with the challenge of how to fill any unused, unwanted space.
The workplace situation today is similar to the plight of big box retail that was left empty as retail sales transitioned online. That produced a creative wave of adaptive reuse that converted big box retail sites into everything from trampoline parks to warehouses.
However, the solution for unused office space – not to mention the future of work is complex. A new way of thinking will be required as we figure out how best to reuse empty of fice space. It will also be required as we look to provide options for workers who increasingly need a break from bringing the demands of the office into their home.
Proposed Ideas for Office Reuse
CoStar recently reported that new U.S. office leasing volume was below its five-year, pre-pandemic quarterly average in the second quarter of 2023. This was created by a smaller average lease ize. The report noted that while the total number of office leases signed was not far below the period between 2015 and 2019, the average amount of space leased was nearly 20 percent smaller. Simply put, office users are leasing less space after the pandemic. Options for office reuse abound. Municipalities are examining ways to reduce office vacancies to possibly boost their much-needed housing supply. For example, San Francisco’s Office of Economic and Workforce Development and Planning Department has requested that downtown building owners provide proposals to convert empty commercial space into housing or other uses to revitalize a now-vacant downtown where office space is underused and employees work from home.
However, from a real estate perspective, office-to-residential conver sions present another set of challenges as buildings must be fully vacant. Plus, a complete residential conversion time and capital intensive. This is to say nothing of the daunting need to gain local community approval in most cases.
Industrial is another creative reuse option for office space. A recent report from Newmark noted that more than 15 million square feet of offices across the U.S. had been converted to industrial use. This is a 33.7 percent increase over the past two years. Abundant creative reuse solutions even include the conversion of a now vacant, 300,000-square-foot office property in Concord, Calif., (East Bay) that formerly housed Bank of America is now being considered for conversion into a vertical farming facility.
While the uses proposed to convert office buildings to other uses are wide-ranging, these opportunistic investments can be complex risky and time-consuming for owners and investors. Moreover, while adaptive reuses are helpful in reducing vacant office inventory, not all buildings are candidates, and adaptive reuses don’t address a growing need for reposition ing office properties to accommodate changing work patterns.
Coworking Fills a Growing Gap
Consider the fact that around 27 percent of the U.S. workforce worked remotely at least part-time as of September 2022, according to the Bureau of Labor Statistics. MIT Sloan School of Management noted that academic surveys suggest the number could be closer to 50 percent.
While there is an increase in the number of people working from home, there are still shortcomings with that choice for many professionals who require privacy, collaboration and a professional environment.
Flexible workplace solutions must be part of the larger strategy. This becomes especially true when you consider employees’ stress of working from home when it involves families and other obligations.
An office landlord kept this in mind when he was tasked with filling a challenging-to-lease space in West Covina, Calif. The property ultimately became an ideal “incubator” for a new coworking concept focused on suburban markets.
The coworking trend has been popular in suburban, communities that offer high per-capita income, easy freeway access and walkable retail amenities. The flexible coworking option provides work environments due to the members’ homes so they can use it when they need it.
At TailoredSpace, for example, about 80 percent of members live within a five-mile radius of its sub urban locations. The suburban model has allowed our Southern California portfolio to maintain an average occupancy of 90 percent, with predominantly service-based clients.
Unlike many proposed adaptive reuse options, coworking spaces provide a solution for landlords looking to quickly fill large, empty office space with minimal time and capital risk.
How and where people work is changing – and the impact on the office market will require many solutions. Coworking serves as a compelling option for both the landlord and the suburban-based, work-from-home employee and entrepreneur.
The TailoredSpace team is proud to have been recognized as one of the top coworking spaces in Southern California, and thanks Western Real Estate Business for its feature piece.
Try TailoredSpace For Your Coworking and Office Needs Today
Ready to embrace the coworking revolution and find an office space that’s just as forward-thinking, innovative, and dynamic as you are? Whether you’re an individual looking for a vibrant community or a small business seeking a scalable, cost-effective solution, TailoredSpace has the ideal workspace for you.
Discover the perfect fit for your work style. Check out the ever-growing list of TailoredSpace locations today to sign up, or contact our team about a coworking partnership agreement.
