In exploring the evolution of how we approach work, and with millennials poised to be the majority of the workforce, the effecting changes ripple to other traditional services. With digital capabilities coming to the forefront of how business is conducted, workspaces have seen permutations shifting from traditional offices to the growing trend of coworking spaces.
How landlords and property developers deal with these changes in demand for commercial real estate and office space is a pressing issue. Only 61 companies in the Fortune 500 companies remained since 1955 to 2015, with close to just 1 out of 10 of these huge corporations being able to stand the test of time in 65 years. This change only seems to be accelerated, with statistics from the FTSE showing 49 out of 100 remaining from 1999 to 2015.
We have seen the emergence of companies that catapult themselves from obscurity to superstardom backed by the introduction of new industries, or through creative means of reinvigoration and reinvention.
The survivors in an ever growing global market
From the numbers alone, the average lifespan of a company is getting shorter. And there is a clear disconnect when the lifespan of companies in certain industries average 6 years, and some commercial property leases go to 7 years and beyond, wondering why such an attractive deal isn’t panning out as well as hoped.
The demands for companies to be adaptive to market changes and demands makes taking up leases for work spaces that might not fill out in the foreseeable future, for lengths that they cannot guarantee impractical in the face of business survivability. This is not a trend as property developers and landlords might hope for, the world cannot move back technologically.
Graphic of ad tech companies exiting and looking for M&A as an example for company life expectancy
By segmenting the workspace to allow for multiple tenants, offering the flexibility of lease, ease of access, and attractive pricing models, landlords will be in greater sync to their tenant’s needs and maintain a healthy occupancy rate.
How developers and commercial landlords view and redevelop their commercial space has to evolve, to accommodate a growing eventuality of coworking being the most appealing option for the modern day business.
Having partners, staff, and clients into their space, companies will want to have their own distinct look and visual branding to give the right vibe and impression. As we see certain commercial districts getting modeled after distinct services and industries, a similar broader scope presents itself and could come across as extra legwork for landlords to decide upon. However, it opens up opportunities for both landlord and companies to work together in joint ventures for a shared space, giving companies a means for greater collaborations with an active hand in the choice of fellow tenant, and for landlords to be synonymous and in sync with the needs of specific industries.
One-size-fits-all office is out, the flexibility of a coworking space is in