The COVID-19 pandemic impacted so much of life from the way people work to expectations about workplace flexibility due to the pivot towards work-from-home.
After more than two years of forgoing the office, many employees don’t want to return to long commutes and working away from their homes. Office occupancy rates are starting to creep back up, with some employers calling workers back. The work model, however, has fundamentally changed.
And that has created a growing demand in the real estate niche of co-working spaces. Buying or leasing office spaces is a huge trend of 2022 as remote and hybrid work models look like they are here to stay.
One of the world's largest shared office space providers, IWG, is a great example of this trend. The company has seen a 45% increase in the use of their co-working spaces at 130 locations across Canada. This is true in smaller towns and rural areas, as well as larger cities.
As another example, the co-working business Collingwood Foundry saw a 200% increase in demand at their Toronto-based location and ended up purchasing more space, expanding significantly from 4,500 square feet up to 7,000 square feet.
This spike in demand for co-working spaces certainly accelerated as a result of COVID-19, but it didn’t start there. Desire for flexible workspaces has been growing at an average annual rate of 23% since 2010.
In fact, the real estate analytics firm JLL predicts that co-working spaces could account for 30% of commercial office space by 2030. On the other hand, it wasn’t that long ago that the office-space start-up WeWork went off the tracks.
So, what does this all mean for real estate? At the very least, it shows a growing market and new opportunities that could be of interest to some investors – but, like any investment, it’s not without risk.
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