Defining a decade in commercial real estate
As the way we work has changed forever, coworking played a huge part in the CRE industry of the 2010s
It’s not an exaggeration to say that the past 10 years have seen a huge shift in office culture – and the fate of commercial real estate along with it. The development of swish new apartment blocks may have played a big part in a buoyant market, but there’s no doubting that the jewel in the crown over the past decade has been the growing trend for coworking and the consequent rise in flexible office space.
Once the preserve of the city centre, flexspace can now be found in increasingly diverse locations – urban, suburban, even pastoral – following a radical rethink of the way we work.
As the concept of the cubicle has gone the way of the dodo, commercial real-estate in the 2010s was firmly fixed on coworking – and there’s no indication that’s it’s going to slow down in the decade to come. “Coworking is no longer trendy, it’s solidified,” Michael Berretta, IWG Vice President of Network Development, told Bisnow. “People demanded more workplace options outside of the traditional corporate office, and we expect that trend to continue into the 2020s.”
The research suggests that Berretta is right: commercial real-estate services firm Jones Lang LaSalle (JLL) predicts that 30% of all US office space will be flexible by 2030 (and given how small a share of the market it currently occupies, the potential for growth is huge).
Millennials are at least partly responsible for this shift. Being the largest demographic in the global workforce, it stands to reason that their way of working is the one that resonates most strongly with CRE developers. Their way is one of autonomy and interaction, where the official hours of work are less important than the always-on culture afforded by the digital revolution.
At the same time, millennials place a greater emphasis on work/life balance than their parents, so it’s not surprising that they’ve embraced coworking with its commitment-free approach to office space, in premises that often encourage community and collaboration.
Property technology, or PropTech, has had a big impact on CRE in the 2010s too. From the micro level (replacing a keycard with an app to access a building) to the macro (creating an entire blockchain to enable the viewing of properties and subsequent secure exchange of contracts), it’s had a truly disruptive effect on an industry that wasn’t known as an early adopter of smart tech. Such are the changes in CRE, however, that it wasn’t going to be long before technology caught up.
And as the biggest real-estate prediction in the 2020s – that of flexspace – shows no signs of slowing down anytime soon, we can expect to see technology deal with even more “pain points” suffered by the industry. Just like the Fourth Industrial Revolution that has revolutionised work culture, PropTech has revolutionised the industry that supports it too.
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