More desks for hire: As co-working grows, new spaces rush to open
A report indicates co-share spots could one day represent 20 per cent of the entire office market
Need to borrow a stapler or a pen? There's a new workplace just off Toronto's trendy Queen Street West where you can borrow the entire office.
Spaces, opening at the end of November, is a co-sharing office. It's a 46,000-square-foot, eight-storey building where you can stay and work for a day, a week or a lifetime.
It comes complete with the amenities a worker, especially a millennial, might expect – good WiFi, lots of electrical outlets and smartboards, a rooftop patio, ground-floor hipster café and, of course, a lounge area with foosball.
In a co-shared office, many individuals, professional services or different companies work under the same roof, for organizations and firms that are not necessarily related. Sometimes they're together at the same big tables, renting tiny fractions of buildings or rooms on flexible rental schedules.
"The design of co-sharing workplaces has been evolving," says Wayne Berger, executive vice-president of Spaces Canada. "People discovered that they can't work all the time out of the coffee shop or at home; they need space that's small enough and flexible enough that they can afford."
Typical co-sharing agreements are similar to gym memberships, where a renter signs up on a monthly basis and can come and go to a co-sharing company's various workplaces in different locations or cities. While some co-sharing tenants enter rental agreements for several months or even years, co-sharing enables people and businesses to park with their laptops and lattes for as short a time as a day.
Rates quoted are around $600 a month for a dedicated desk in a co-shared building or less than $300 for a "hot desk," in which a renter can grab an empty spot the way you might do at a coffee shop.
The new exposed-brick-and-beam facility in Toronto is the first in Canada for Spaces, a Dutch company that specializes in this growing trend in office accommodation. Spaces itself was acquired in 2015 by Regus, an office sharing giant that offers more traditional short-term workplaces in office towers and suburbs, with 41 locations in Toronto alone and nearly 600,000 square feet of space.
Co-sharing companies have a growing number of rivals around the world, as the trend becomes more common.
"There's quite a transformation going on," says James McKellar, associate dean at York University's Schulich School of Business and director of Schulich's Brookfield Centre in Real Estate and Infrastructure.
Countries such as South Korea are leading the way, says Prof. McKellar. "They're beginning to redefine the whole concept of an inner-city community," for example, by integrating facilities such as libraries and community centres into co-shared office space.
Canada is moving fast, too, though. "The shared workplace and co-working trend seen for some time in other countries has now officially arrived in Canada and is poised to shake up the Canadian office space market like nothing before," says a report from Commercial Real Estate, Tenant Advisory Services (CRESA), which provides research on workplaces.
"The shift in perception toward shared office space has been rapid and quite startling," it says in the October report. "Our own view is that shared office space could be as much as 20 per cent of the overall office market within the next decade."
The current percentage in Toronto is less than 1 per cent and it's even smaller in Vancouver.
It's changing fast, though. WeWork, a giant co-sharing competitor that is valued at $20-billion (U.S.) on the markets, already has locations in Vancouver and Toronto – including one just around the corner from Spaces' new Toronto location.
WeWork's activity in the United States is a sign of what's to come in Canada – it recently purchased the flagship Manhattan Lord & Taylor department store for $850-million to set up as a co-share facility in New York. (WeWork is also taking over floors in Hudson's Bay Co. anchor stores in downtown Toronto and Vancouver.)
Co-sharing is increasing because of technology, demography, sociology and the economy, say those who are involved with or watching the trend. "Because of the internet, people can work anywhere," says Spaces co-founder Martijn Roordink.
Prof. McKellar adds that today's most prized workers – in technology, finance and knowledge-based industries – are no longer as satisfied as their predecessors were with toiling away in a monolithic company office.
"The big firms recognize that the jobs follow the people, and younger workers want to live in cities," Prof. McKellar says. "A lot of firms that were in the suburbs are moving downtown, and it's all being driven by access to bright young people."
While co-sharing suits bigger firms because they can be flexible in the amount of office space they need, it can be especially suitable for startups or second-stage companies that are just getting off the ground and don't want to be tied to big long-term leases.
Privacy and protecting intellectual property can be a concern, admits Mr. Berger at Spaces, but most companies protect their data nowadays by storing it on secure sites in the cloud.
Although co-sharing is now becoming big business for companies such as WeWork or Spaces, it has its roots in organically developed workspaces such as Toronto's not-for-profit Centre for Social Innovation or the MaRS Discovery District, which was designed as a space for big thinkers and prospective funders to mingle.
"Co-sharing is definitely part of our model," says Karen Greve Young, MaRS Discovery District's vice-president of partnerships.
"Companies come here to be co-located with organizations they want to work with, and they're indifferent to which particular desks they have within that open space."
The point is that, she says, "they learn from each other."