Editor's Note: This story was originally published in the Feb. 4, 2019 issue of GSA Business Report.
One element of commercial real estate that has grown in popularity is the coworking space — in which, simply stated, more than one company operates under the same roof. Some coworking spaces provide locations for companies or freelancers to collaborate under a similar theme. Others are not industry-specific.
An internet search of coworking spaces in the Greenville area turns up spaces like Serendipity Labs, Endeavor Greenville, OpenWorks and The Wheelhouse, each offering various services that can include differing member leasing terms, workspace options and locations. In Columbia, coworking spaces include SOCO BullStreet and Regus at 1320 Main St.
An office experience is taking the place of the static workplace of prior generations, according to Avison Young’s 2019 North America, Europe and Asia Commercial Real Estate Forecast. Energy, light, collaboration, purpose, sustainability, and health and wellness are as much drivers of the work experience as the underlying businesses, the report said.
Coworking spaces offer many office necessities, such as meeting room spaces and office supplies.
Ashley Stidfole, director of sales for Serendipity Greenville, said coworking spaces offer an office experience that standard offices cannot.
“Coworking venues are popping up all over the place,” she said. “They are no longer just one big open room filled with desks, and maybe dogs running around. Coworking spaces now have more of a professional level to it, as well as privacy that most didn’t in the beginning.”
Stidfole said service offerings and cost are two areas where coworking spaces have an advantage over other commercial real estate options. At Serendipity Labs, located at the former Plush Mill site at 141 Traction St., anywhere from one person to 50 can be accommodated, and at varying membership levels. The members, as they are called at Serendipity, can have just a dedicated workspace, or a dedicated desk, or an individual office. Offices can be set up for just one person or more, and include desks, industry-compliant wi-fi, 24/7 secure access and on-site parking, which Stidfole highlighted as carrying a premium in Greenville.
“The fact that coworking spaces offer flexible lease terms makes them more affordable and viable for a company,” she said. “You don’t immediately have to sign on for a five-year lease. And you can renew and upgrade as you go.”
Avison Young’s Margaret Donkerbrook said, in the report, that “coworking operators are dominating U.S. office markets as tenants pay up for term flexibility, amenities and the ability to shift long-term lease obligations off their books.”
“Landlords are feeling pressure to renovate older properties to compete; as a result, plug-and-play speculative suites and tenant amenities, such as conference centers and lounge areas, are becoming ubiquitous. Ultimately, there will be some shake-out in the category; however, coworking will remain part of the real estate lexicon,” she said.
When asked if she thought the popularity of coworking spaces was generational, Stidfole said it might have started out that way, but now is influenced more by market factors.
“Commercial brokers can still sell our office space to clients and get a commission,” she said. “And if a company is coming to Greenville from overseas and needs to get a feel for the city, they can utilize the flexibility of a coworking space, instead of immediately leasing or building a location with additional costs.”
Serendipity Labs is home to companies specializing in marketing, accounting, engineering and software development. The space is not industry-specific. Stidfole said the space opened on Oct. 15 and now has 60 members representing 30 companies.
Mark E. Rose, chairman and CEO of Avison Young, said in his company’s report that understanding demand is key to navigating the market.
“While workplace changes can be confusing — driven by technology, generational trends and the new economy — they largely represent positive developments for our industry,” he said, in the report. “As coworking and flexible-office providers take down a significant amount of space, what we are seeing is a change in tenancy, not a slowdown in occupancy. Leasing is stable and longer-term in nature, and most businesses retain their office footprint throughout economic cycles.”