Co-working trend may cause problems for office building landlords

The co-working trend has been popular among entrepreneurs and small businesses looking for short-term communal office space.

A new report from Green Street Advisors suggests that this could be bad news for landlords with a prediction of a 2% to 3% decrease in office demand by 2030 as the shared office space trend is adapted by larger businesses.

The report estimates approximately 14,000 co-working locations world-wide by the end of this year in contrast to 600 in 2010.

“The most ominous prospect for landlords is that [corporate] users could ‘outsource’ big chunks of their headquarters and regional offices to co-working operators,” the report warns.

“That could undermine the stability and security of cash flow for landlords and could create more churn among tenants," Green Street analyst Jed Reagan said.

Photo source: Jason Alden/Bloomberg News

Article source: https://www.wsj.com/articles/co-working-trend-eats-into-office-demand-1510090427


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