A tight Columbia market may lead to office transformation
- Vacancy rates steadily drop as small office spaces are leased throughout the market.
- Overall weighted asking rental rates are expected to be lower due to the lower quality of the remaining availabilities.
- Office buildings are evolving to keep up with coworking trends, technological advancements and healthy lifestyles.
Coworking, technology and healthy initiatives drive office transformation
Office properties are evolving throughout primary U.S. markets due to coworking space popularity, enhanced technology and health-conscious initiatives; all three trends are interwoven with one another and are transforming the nature of the traditional office building. Coworking is defined as a group of people (often from various companies) using a shared workspace. The popularity of this modern way of working is increasing exponentially. Not only does coworking allow start-ups and small businesses to work in open, contemporary spaces with amenities they may otherwise be unable to afford, it also provides larger companies the opportunity to “test the waters” in a new market by using swing space or a small satellite office prior to making a long-term commitment in a new location. In addition, office owners are able to upgrade and fully lease the remaining spaces in their buildings through the coworking model. Coworking spaces will differ from market to market, but will likely have the following similarities: high-end finishes, collaboration space and amenities; advanced technology, with the ability to work remotely; and 24-hour access to accommodate varying work hours.
Not only is workspace evolving, new forms of technology, such as driverless vehicles, may transform office buildings on a larger scale and sooner than expected. While this trend is still in the testing phases and it is indeterminable when it will turn from future hype to a real-world everyday application, if it continues as is expected in “fair-weather areas,” office building owners will need to plan ahead to successfully adapt to it.
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