As technology continues to change the landscape of how Americans work, commercial real estate developers and the law firms that work with them are keeping their eye on the rise of coworking spaces in the city. More and more, companies are letting go of large office spaces and hiring for positions that will work remotely. Given that not everyone can or wants to work from home, coworking spaces provide the happy medium.
What attracts commercial real estate developers to this niche market?
Flexible office space in Houston
Most coworking space developers rent by the office or even by the cubicle. This gives small businesses more flexibility to rent only the space they need. Yet those businesses do not have to sacrifice employee amenities.
Coworking spaces can also offer a potential avenue for portfolio diversification for established CRE companies. Houston currently shows a high office vacancy rate and lots of potential for sublease situations. These sublease agreements differ from the traditional lease agreement but offer the same benefit to landlords and tenants.
Additional services at coworking spaces
Most coworking space developers have focused so far on the office space itself. Some coworking models focus on the aesthetic of the office space or other niceties such as kitchens or gyms that would attract more individuals to the sites.
A new player in the Houston coworking scene, H-Town Incubators, has decided to add value in another way. This company leases out coworking space as well as business services like accounting support, marketing support or health insurance co-op plans. H-Town Incubators hopes to make it easier for small businesses to succeed by shoring up the strengths of these smaller operations with experienced C-level support. Time will tell if other large commercial real estate developers follow a similar path.
This new business model opens interesting opportunities. There are also fascinating legal questions regarding the ownership and involvement of the coworking space developers in the small businesses that thrive in their flexible office spaces.