Coworking sites are able to offer shorter lease terms and flexible square footage, as well as finished, high-quality, move-in ready space. Landlords and owners alike have been experiencing an increased amount of pressure from the rise of the popular coworking model.
Traditional landlords are being pressured to be amenable to shorter term or more flexible lease terms to offset the challenges of growth or uncertainty for new and existing tenants. For example, landlords will offer to move tenants within their building to accommodate growth or contraction, even if the original terms have changed which allows the landlord to keep the tenant within the building.
Another coworking benefit owners have implemented is to create spec suites. By partnering with design firms and furniture companies, landlords can build turnkey suites that can capitalize off easy, immediate and trendy space, which many tenants find attractive. These suites have the look and feel of high-end space without having to deal with the year-long design-build processes. Spec suites are successful for both landlords and tenants because they simplify the tenant move-in process, help tenants find the space that they want while offering more privacy and are often more flexible to fit larger space needs than many coworking groups are able to offer.
Tenant rep broker Tom Hoffman has seen these tenant acquisition strategies work for the clients he represents. He says, “Owners have been wise to start creating turnkey spec suites. Not only are they attractive to tenants, but these spaces also tend to be more affordable compared to a space of similar size in a coworking environment. This is especially true if the lease negotiation flexes to shorter terms."
Steve Nilsson, CCIM, SIOR
Colliers International | Minneapolis - St. Paul
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