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Shared office spaces and public working environments are the future of modern business startups. After all, with entrepreneurship and new industry growing in popularity each year, not every startup can afford to sink capital into a private office or work environment – nor do they all want to.
With the recent evolution in the way most of the world does business following the Covid-19 pandemic, coworking office spaces are at a newfound height of popularity that they have not seen before. So, now might be a great time to jump on board this innovative commercial real estate investment.
So, let’s take a look at coworking office spaces and how they can be incredibly advantageous for investors looking to expand their commercial portfolios.
However, before we get started we would like to offer you our expertise and knowledge about working with and financing coworking office spaces. So, if you would like to learn more, you can book a free strategy call with our team at the link below.
What is a Coworking Office Space?
In essence, a coworking office space is an environment designed to accommodate multiple businesses in a single space. These shared working spaces can include communal drop-and-work spaces, as well as private offices or dedicated suites for business that need more space.
These spaces are meant to help alleviate the financial stress of building a business by cutting down on the costs for individual businesses and entrepreneurs through shared offices, utilities, and services such as cleaning staff.
These also serve as networking hubs for startups and individual professionals looking to build a business by offering a place where people can connect with likeminded individuals and share their skills.
What Do You Need in Order to Create One?
One of the key advantages of investing in a coworking office space is the fact that they can be designed to accommodate as many or as few people as you can support. However, there are a few key amenities that people will typically need when they are looking to inhabit a coworking office space.
First, you need to have a sufficient number of desks and workstations. These can be individual desks, cubicles, or communal tables where people can open up a laptop and get to work. Ideally each one should have access to power outlets so that the workers and businesses can set up and get working no matter where they drop themselves in the space.
You should also have a high-speed internet connection. This should include a strong Wi-Fi signal as well as potential ethernet hookups – especially if you offer individual offices or business suites.
Finally, there should be a private meeting room or presentation space for businesses that need to share information to coworkers or clients away from the public eye.
There are plenty more amenities you may wish to include such as a kitchen and dining space, recreational spaces, printing services, and more. However, these are not always essential.
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Why Are Coworking Office Spaces Such a Strong Investment?
So why exactly are these such popular investment opportunities? Well, there are a few notable factors that make coworking office spaces especially popular. These factors are:
Strong Cash Flow Potential
Instead of offering a commercial space to a single business and earning the cash flow you may get from a single rent source, coworking office spaces allow you to earn multiple streams of revenue by welcoming multiple tenants or various sizes and structures into the environment. With each of these tenants, the potential cash flow of the property increases – making you more money while you support local businesses.
This increase in cash flow is only made stronger if you offer extended hours or a 24-hour coworking space, thus increasing your capacity to rent the property to more tenants.
More Flexible Business Structure
Unlike traditional commercial tenants who require more structured leases, coworking spaces offer a more flexible business model that can promote additional tenants to rent from you before turning into long-term tenants.
While some tenants may require the month-to-month structure and long-term use of the property, there may also be businesses that are looking for a week-to-week solution while their own offices are renovated, or they move between locations. You may also attract professionals who need the space for a few days at the most or simply need a business address to route their mail to.
Each of these tenants will have their own needs, and while it will take some extra effort to manage these tenants, that effort can potentially pay off in a meaningful way later on.
Potential to Make Long-Term Partnerships
Finally, many businesses and startups that you may want to do business with as an investor could find themselves starting in your coworking space – thus making your investment a breeding ground for new business relationships and opportunities.
This could be as simple as an independent bookkeeper needing an office to work from whom you later decide to hire for your investment properties, or a contractor who needs a place to do their paperwork until they get a dedicated office. Alternatively, some of your tenants may eventually want to move into their own dedicated commercial spaces and you can use that opportunity to try to convert them into long-term tenants in other commercial investments you own.
Coworking Spaces and Hybrid/Remote Work
Ever since the Covid-19 pandemic, the number of workers in Canada who work on a hybrid schedule or fully remotely has increased massively. Of course, not everyone has a home office or the ability to focus on work within their own home. So, coworking spaces can serve as an incredibly beneficial resource for remote and hybrid workers locally – as well as travelling professionals.
Kickstarting Your Coworking Space
If you are looking to finance your investment in a coworking space today, give us a call at LendCity. Our commercial financing department will gladly help you get connected with a lender who is best suited to your needs.
To get started today, visit us online at LendCity.ca or give us a call at 519-960-0370 today. Alternatively, you can click the link below to book your free strategy call with our team today.