Commercial Real Estate Needs to Join the Shared Economy
If you think office space is at a premium because of the recovery, you’re wrong.
While some office space may be going for premium prices, there’s a $5.5 trillion dollar “market” of unused space in America. And the spectre of that space is quietly changing the way office space is viewed–by landlords as well as occupants.
“Real estate as a service is the upcoming trend,” said John Vivadelli, CEO of AqilQuest, provider of software and services design to enhance corporate space utilization.
Vivadelli was among panelists addressing “The Evolution and Revolution of Work & Space” at the Agile Workplace Conference in Arlington, VA.
Vivadelli noted that less than 40 percent of office space is being used at any given time in the U.S. and Europe. Driven by outdated facilities management practices and a growing number of employees who work somewhere besides the main office, that statistic is starting to catch the attention of those who supply space and those who pay for it.
“What will be done with all that excess capacity?” he asked.
His answer: Look at the Uber/Air Bnb models, where the shared economy traces its billion-dollar-startup roots. Both business models are based on 100 percent utilization of underutilized assets.
“The shared economy gives people banding together more power. People get more of what they want and less of what they don’t want.”
Inevitably, landlords burdened by unused capacity will begin to rethink such practices as five-year leases and facilities built for investors, not users. They will offer short-term workspaces at flexible prices.
The office sharing vendor WeWork is more directly addressing the underutilization in office space by creating shared spaces where once workers worked in single-occupant offices. WeWork solves a problem for building owners with excess capacity by leasing that space, then parsing it out to those in the mobile workforce.
People who choose a WeWork space may be distance, or distributed, workers for another employer. But their “coworkers” though not employed by the same company, are, by and large, people who share certain key values, Vivadelli said.
“People are going to choose where to go to work because of the people that are there, not because of the space,” he said. “