Coworking spaces at retail properties are predicted to grow at an annual rate of 25% through 2023, according to a new study from commercial real estate service provider JLL Retail.
The retail space sector has grown an average of 23% per year since 2010, with the highest number of coworking spaces in retail being either in malls (21.3%) or urban locations (20%).
“Coworking is no longer a startup only culture. Most flexible space today actually provides dedicated and private areas to larger companies that need to scale their workforce up or down,” said James Cook, Director of Retail Research at JLL in a statement. “This wide range of needs has created four distinct coworking spaces that we think will increase in retail, each tailored with different amenities.”
These four distinct space types are:
- Retail Launchpads: These are the costliest at $404 per person on average, and are designed to provide startup brands and innovative tech companies access to their target consumers.
- Business Boosters: At an average cost of approximately $255 per person, these are usually located in higher-income areas and include special business development tools such as capital, consulting services, creative support, specialty equipment, classes and mentors.
- Creative Coalitions: These workspaces for artists and creatives are designed to draw in Millennials by combining community events and retail in one space. More than 75% of these spaces are in urban locations.
- Telework Hubs: The most common type of these workspaces is a coworking format for office workers, entrepreneurs and creatives, and they are designed to fill vacant retail spaces.
“The current retail market is pushing landlords to find new ways to invigorate their space with alternative tenants, including coworking spaces,” said Holly Rome, Director of Retail Leasing at JLL in a statement. “Setting up a coworking space in a retail property provides workers a fun, yet functional space with great accessibility, ample parking, and value-add amenities like personal services, shopping and food options. On the flip side these tenants bring in daily traffic and have a stable master lease that’s typically five to 10 years.”