The concept of coworking space has been around for a few years, but really saw an acceleration in the trend over the past year or two. In places like Manhattan, Queens, and Brooklyn, NYC properties are being converted to hybridized coworking space and propelling revenue for commercial real estate investors.
A Coworking Primer for CRE Investors
Coworking had its first formal emergence about a decade ago, though technically earlier examples can be found. Essentially, coworking allows people to reserve desk and office space in a business casual environment. The concept has really taken off in NYC and other cities, where tech companies, remote and mobile workers, and people who just need space to concentrate need to get things done. Some companies offer coworking space where people can rent space by the hour or half hour, with extra charges for time needed afterward. Some places even offer coworking space on a subscription basis. This has opened opportunities to property owners in NYC who have office space, but are in-between long-term tenants.
Hybrid Coworking Space in NYC
Currently, commercial properties in NYC are offering unique hybrid coworking spaces as a means to maximize revenue in buildings which would otherwise go wholly or partially unoccupied. There are coworking spaces sharing tenancy with retailers, cafes, restaurants, or even as bonus features in luxury apartment buildings. This could provide a new way of utilizing space in opportunity zones and unoccupied storefronts throughout New York City.
The Strategy for CRE Investors
There are a number of commercial real estate investors who are looking to acquire business properties in Brooklyn and Queens in the near future. There are even those investors who have been growing a “fix and hold” portfolio so they can renovate and rent out spaces when the market seems favorable. In both cases, investors can lease space to multiple tenants, such as retailers and coworking operations. Another option is for CRE investors in NYC to create their own independent coworking space, or to build it into their multi-unit rentals. As more workers are taking up mobile and remote careers, coworking is only going to grow.
At Express Capital Financing, we offer funding strategies and solutions for commercial real estate transactions and projects throughout NYC. If you are thinking of tapping into coworking space to generate an extra revenue stream, contact our offices today.