Idle capacity is all around us. Cars often sit unused in driveways or parking lots for hours each day, and a typical office, even if it’s occupied and busy during the business day, normally sits empty after hours, some two-thirds of the day.
Tapping into this excess capacity is the advantage of the sharing economy.
In a white paper titled, “Exploring the New Sharing Economy,” John Madden of the University of British Columbia defines the sharing economy as “economic and social systems that enable shared access to goods, services, data and talent.”
Madden cites car-sharing. “Daimler’s Car2Go service allows an individual to locate a Smart car on a mobile phone, gain access to the vehicle immediately through a card reader and PIN number, then drive it within a defined service area and leave it in another location for someone else to use. The driver is charged only for the time the car is in use.”
That’s good for users, who can get where they need to go without the costs of owning, garaging and maintaining a car. But it’s not as good for traditional retailers, repair providers and salespeople. “The sharing economy poses a challenge to large companies, because it is intercepting the traditional relationships that have existed between businesses and customers for many years.” By cutting out the “middlemen,” Madden notes, the sharing economy is putting their jobs at risk.
“The shared economy has also expanded into the commercial real estate sector,” Madden notes, often with the goal of making better use of fixed assets that might be unused for parts of each day. “Many forms of shared commercial space use have emerged, including various types of shared office spaces and creative spaces.”
Andrea P. Foertsch, a lecturer at Cornell, was among the first to publish about the notion of coworking, which has taken root over the past few years. “The co-working concept fuses the desk hoteling concept relied upon by management consulting firms for decades with the fitness club membership operational model to bring affordable, amenitized workspace to the public.”
In her white paper “Workplace Innovation Today: The Coworking Center” published by the NAIOP Research Foundation, Foertsch says that key physical features of coworking centers include:
• High-speed Internet service
• 24/7 secure building and parking access
• Secure, covered bike storage
• Plenty of daylight from uncovered windows and skylights
• Desks and tables for traditional computer work as well as furniture for lounging and socializing
• Architectural character (which she says is favored, but not essential)
“Like prior innovative workplace models, coworking centers can be assets to commercial property owners, both as tenants and as generators of spinoff companies that may become future tenants,” she writes. “Coworking is just getting started as a workplace movement, and awareness of opportunities in this shift in workplace identity can benefit building owners.”
And as the millennial generation takes a greater role in the economy, coworking is set to explode, which could pose risks as well as benefits for real estate professionals.
Millennials “value autonomy, prefer offices with an open floor plan and are more willing than earlier generations to share their workspace with someone else,” writes Audra Capas in Development magazine. “At the same time, 77 percent place a high premium on face-to-face communications in conducting business.”
Capas notes that “this generational shift in the use of physical space has vast implications for the real estate owners, developers and designers who are acquiring, retrofitting and outfitting the office buildings of the future.”
The future, Capas predicts, “will belong to owners and developers who not only understand and can weather the market’s vagaries, but who also respond to their tenants’ nascent work and lifestyle needs by creating diverse, dynamic places that inspire people to perform their best and live life to the fullest.”