It’s time to rethink our office vocabulary. As is so often the case, the U.S. is ahead of us when it comes to formulating snappy business terms. Why?
Because we are still talking about coworking. And by that we mean (and manifest, at least in our minds) a form of work that serves only one niche: the classic coworking space, characterized by open-plan offices, long workbenches and its young clientele between 20 and 30. While we wonder in this country whether this form of work for freelancers and young entrepreneurs will survive the next crisis, we see in the U.S. how coworking is revolutionizing the market for office space. Not as coworking, but as “Workplace as a Service“.
One of the biggest companies in this new industry (yes, that’s exactly what it is) is Industrious. In the slipstream of the noisy WeWork IPO, Industrious has been busy opening locations and raising funding, most recently $200 million from CBRE. And CBRE is not an over-motivated venture capitalist, but, in their own words, “The global leader in commercial real estate services and investments.” One might assume that they know something about corporate real estate.
Estimates suggest that the market for “Workplace as a Service” in the USA alone will grow to around USD 80 to 120 billion by 2025. For traditional real estate providers, this is both a risk and an opportunity. Risk, because in the future more and more customers – including an increasing number of large corporate clients – will rely on Workplace as a Service and you don’t have a corresponding offering. Opportunity, because – if you have an appropriate offering – the value added is three to four times higher than in traditional space leasing.
To conclude, a quote from one of the investors at Industrious: “Workplace as a Service will create and destroy more value in office real estate than any other phenomenon in the next decade. Because large companies are embracing real estate flexibility as an option – and recognizing that workplaces are the ultimate tool to retain and attract talent.”