From Midtown West to Dumbo Heights, co-working spaces are upending traditional office rentals, driving urban regeneration, and transforming the neighboring residential real estate landscape, too.
An influx of creatives into transitioning neighborhoods has a direct impact on the value of residential real estate. Co-working strengthens the connection between people and the places they share. Where co-working spaces go, so too go Millennials, who may ultimately become renters and buyers in the neighborhood, changing the residential real estate landscape and driving up property values.
For an insider’s take on the market, my team checked in with Sophy Moffat, a global real estate adviser at DTZ, now part of Cushman & Wakefield Global, to learn more about how the co-working revolution is reshaping neighborhoods. Ms. Moffat is also the co-author of the recent report “The Co-working Revolution.” (For in-depth metrics, access the latest report here
“Flexible working providers tend to buy cheap buildings that are in need of refurbishment,” says Moffat. “The presence of newly refurbished buildings in place of old and abandoned assets positively impacts the entire neighborhood.” WeWork Leads the Way Transforming Brooklyn and Queens Neighborhoods
With a $10 billion valuation in 2015 according to Bloomberg Business
, WeWork Companies Inc. is a major shared office space provider with 20 New York locations. This includes space in the new mixed-use development Dumbo Heights
, a complex of five interconnected office buildings at the south end of the Brooklyn neighborhood. Owned by Kushner Cos., RFR Realty and LIVWRK, Dumbo Heights bills itself as the “Bullseye of the Brooklyn Tech Triangle”. WeWork is also launching a new Queens outpost at Studio Square
. Just 10 minutes from Manhattan, the new Astoria hot spot is part of a place-making transformation to the neighborhood that’s historically been better known for weekend beer garden parties than high-end commercial office space. Co-Working and Mixed Commercial Developments Transforming London & Paris Neighborhoods
The co-working revolution isn’t limited to New York. In London, co-working companies are involved in the redevelopment of the King’s Cross area, near the busy King’s Cross St. Pancras train station. Areas like Shoreditch, Battersea and other formerly working class/industrial areas are rapidly transforming into mixed-used residential/commercial hubs, driving new investments.
Similar changes are occurring in Paris, too, as tech companies drive neighborhood redevelopment. Watch for new development in the 13th to 19th arrondissments to meet creative/tech sector growth in the coming year.
China-based People Squared has expanded to 12 locations in Shanghai and Beijing, profoundly impacting workplace culture with a focus on resource collaboration, rather than corporate suspicion, says People Squared found Bob Zheng.
WeWork is not just a force in New York. The company has nearly a dozen global locations, with shared office space in Canada, the UK, Israel, the Netherlands, and Germany. New locations in Mexico City and India are on the horizon, sure to have a ripple effect in the surrounding neighborhood.
The co-working revolution and its impact on residential real estate is one trend my team and I will be closely monitoring in the coming year.