Sharing commentary and articles of interest

Shared Workspaces

Danny Rice, managing director for Colliers International in Florida and contributor to Tampa Bay Business & Wealth, listed seven commercial real estate trends to watch in 2019. Number one on his list was office flex space, including co-working space. He said, “co-working spaces with common amenity areas are doing very well, showing that this concept isn’t just a fad.” After listing many office buildings in the Tampa area that offered shared workspaces he said, “the tenants aren’t just startups: A number of larger regional and national companies are leveraging these facilities to establish satellite offices in the area, without the major overhead.”  Danny also spoke of new accounting rules being rolled out that will change how leases are reported. He says that among other things, companies will have to” list lease obligations on their balance sheet.” Of course, this will give a more accurate picture of the organization that has entered into a lease, but it will also, in many cases, encourage businesses to request shorter term leases from owners.

The Total Business Experience

Even Home Depot, a retail establishment, is experimenting with creating co-working environments where various self-help and expert services are available.

With retail sales floundering, Home Depot is profiting from emphasizing service. They are creating within their retail space, little hubs of business activity, branding themselves as a kind of partner with small and medium businesses by helping these customers have a complete “one stop” business experience. Home Depot seeks to do this by better-utilizing resources, i.e., improving their online presence and viewing their stores as “touchpoints” where customers get most all of the assistance, they require to meet today’s demands.

Office Depot is just one company that is focusing on creating a total business experience for their customers. The harsh realities of today’s online market are causing others to rethink the way they do business.

Online, small establishments formulate their paths for progress. There, small companies find that with small monthly subscriptions, they gain access to virtually unlimited resources that help them compete with much larger companies. In turn, larger corporations are finding that to maintain their market share, they need to act like smaller businesses (minimizing their hard cost).

Many companies come to the conclusion that to expand (or to just maintain their market share) it’s not necessary to raise a lot of capital for physical locations, expensive software, equipment, etc. It’s their Online presence that builds brands and drives business. Online is where the public goes, and online is where the cash enters their coffers.

This whole process of the public’s willingness to accept the online world and businesses adjusting to it, is causing disruption throughout the economy. Finding what the right mix of virtual and physical looks like is perplexing, especially as technology changes so quickly. There are many futurists that will tell you what life will be like in 20 years, but getting there and surviving the change, is the challenge.

So, what are entrepreneurs and small businesses wanting from their physical space? They want affordable state-of-the-art technology, perhaps only paying for the actual time that it’s used. They want experts in related fields and they want to collaborate with others with likeminded ideas. They want a comfortable work environment; in some respects, even an extension of their homes. They want walking access to a variety of eateries. They want a place that is cool, that gives others (particularly their peers and investors) the impression that they have achieved some success. And, of course, they want all of this for the small price of a subscription, with no long-term commitment and only paying for the space they need when they use it. In other words, they want their physical world to mimic their virtual one.  I can’t see any disruption here, can you?  (Information is from an article on RetailDive, “Services Fuel Office Depot growth” By Daphne Howland)