Thoughts on the Future of Coworking
Jeff Reinstein
Operator/Manager of 85+ Coworking Spaces, Executive Suites, and Shared Worksplaces.
By now, most people have heard of all the drama surrounding coworking giant WeWork (The We Company) including their failed IPO and departure of the visionary founder and CEO. So, where do we go from here? Recently people have been asking me “What is the future of Coworking?”
Shared workspace/coworking can be a very attractive business, if operated in a disciplined and profitable manner. Most of the newer coworking companies seem to be focused on top line growth and valuation - not cash flow. When we are looking at opening or acquiring a location, our focus has and always will be on bottom-line cash flow and return on investment.
When Premier Workspaces? signs a lease for a new location, our goal is to get our entire investment back in the first 12 to 36 months. In order to get a quick return, we build out the space and furnish it without going over the tenant improvement allowance. We build a beautiful modern looking space that incorporates open ceilings and concrete floors with contemporary furnishings. (see photo of our newest location in Washington DC). We value engineer it in a way that we stay within the tenant improvement allowance provided by the landlord. We also focus on locations where the landlord will give enough free rent to allow us to fully ramp up the location to 90% occupancy – not an easy task.
By making the right deal upfront, Premier Workspaces was able to build a shared workspace/coworking company that has had 127 locations and currently over 1.6 million square feet under lease or management for a $4.3 million (that’s not a typo – million not billion!) equity investment.
Despite all of the negative WeWork press, we are excited about the future of shared workspace/coworking and believe the trend is here to stay and grow.
Investments
5 年Jeff Reinstein Absolutely, Its an unstoppable International phenomenon because it is driven by an actual need. From a disciplined business perspective, a real estate entrepreneur as expected out of him must have an ability to read between the lines of lease terms and sustain himself when the wind is blowing against him. Literature aside, when are you looking forward to explore India as a market ? Bests, Giri Malpani.
Jeff We use your offices to start Magellan Architects in California. We had a great experience and we would recommend your offices to other businesses. Great article! Pedro
Managing Director at NAI Horizon
5 年I enjoyed reading your post.? As a seasoned office broker, I have followed the trajectory of coworking space, which is so different than executive suite space.? With the right metrics and economics, the concept is attractive and will succeed.? Your conservative business model and attractive space?will ensure longevity and happy landlords.?#CRE#coworking#officespace#tenantrep#NAI#commercialrealestate