State Street's new facility in South Boston is hailed as the latest example of co-working space in a new NAIOP report
There is an immense amount of positivity flowing throughout Greater Boston with regards to the real estate industry. From residential sales, to the leasing of property, to the construction industry improving the inventory levels and more, the commercial market is also thriving. A unique and innovative approach in the commercial industry in particular is now gaining steam in the Hub, known as co-working centers.
These more open working areas are on the up in terms of popularity, especially in Boston, according to a new report from NAIOP. Essentially, workers share the same roof but not the same boss nor company. The survey highlights these creative and functionally brilliant spaces as those, ...combining an array of freelancers, entrepreneurs, programmers, app developers, startups, and anyone else who wants WIFI and a chance to socialize and exchange ideas with other professionals. The centers are different from a traditional office environment, featuring large, central open spaces filled with couches, coffee tables, and casual furniture, with private phone booths and a handful of traditional offices around the perimeter.
These commercial spaces not only save individuals and small businesses money, but they are born out of many generations of public and private sector-sponsored business stimulation movements. While incubators began these efforts, they have led to the development of innovation centers (such as in the Seaport District), accelerators, and these co-working centers.
The latest example of these properties comes to us from a newly opened 500,000 square foot building on A Street. Located at the Channel Center in Bostons Seaport District, this building is owned by the State Street Corp. It is here where they have implemented a built-to-suit space with co-working interdepartmental common spaces and multifunctional areas, thus trying to get away from private, individual spaces.
Rents run per seat here at State Streets building, and have been reduced by 35% to $5,500 from $8,500 per month. Each seat is now entitled to 108 square feet from the previously designed 170 square feet, a decrease of 36%. As a result and given the demand to utilize such forward-thinking space, occupancy increase from 65% to 90% most recently, and the annual cost per employee fell by an impressive 53% from $13,000 to $6,500, hence saving $2.6 Million annually.
As these co-working centers continue to be developed, there are more worth mentioning. Workbar on Atlantic Avenue in Boston has 8,000 square feet of space, while Central Square Cambridge has 13,000 square feet, and there is also the praiseworthy Cambridge Innovation Center.
Some facts from the NAIOP report regarding co-working commercial spaces are the following:
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U.S. co-working centers have grown from just 1 in 2005 to 781 in 2013.
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The U.S. leads the world in the number of co-working spaces.
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Co-working membership increased 117% from 2012-2013.
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Co-working spaces increased 83% from 2012-2013.
Thomas Bisacquino, the President and CEO of NAIOP, came forward to conclude on these findings that, Co-working centers will never replace conventional office settings, but our industry is responding to the growing demand for a different kind of workplace, and were excited about what that means for future development and investment.
More Information: Boston Business Journal
