Fuelled by the high-tech sector – and a shrinkage in traditional tenant demand – co-working space is reshaping the Â鶹´«Ă˝Ół»office market.
WeWork Companies Inc. now claims 261,000 square feet in downtown Â鶹´«Ă˝Ół»while Jersey-based IWG PLC (IWG stands for International Workplace Group), has 446,000 square feet across Metro Â鶹´«Ă˝Ół»under the Regus banner and Spaces, which opens at 151 West Hastings Street this summer.
The Hastings space will be 35,000 square feet and will be followed by 80,000 square feet in the former Tom Lee music store on Granville Street in October, said Wayne Berger, executive vice-president with IWG, who oversees its Canadian operations.
Berger said the Spaces outfitting will mean a large assortment and collection of different-sized offices and team rooms to accommodate an array of companies.
Compared to the size of a typical Regus location, which runs 18,000 to 25,000 square feet, the co-work spaces are massive.
“We wanted to find the right, strategic locations both within the right neighbourhoods as well as in the right buildings,” Berger said. “The size gives us an opportunity to build a really vibrant ecosystem within the building.”
The locations will reflect their particular environments; memorabilia from the Tom Lee store will be part of the decor, while a local coffee roaster appropriate to the area will supply the Gastown location and another planned for Great Northern Way.
“We’re also looking at additional amenities as well that help support the members in that real live-work-play environment, whether it’s fitness facilities, other types of amenities, directly in that space,” Berger said.
The locally integrated workspaces fit not only dense urban environments, but also a mobile, decentralized population. The immediate success of the 2016 launch of Regus in Port Moody underscores the need for flexible office space even in suburban locations, thanks to the large percentage of people now engaged in contract work and non-traditional desk jobs.
This is especially true in Metro Vancouver, which prides itself on a free-spirited culture of innovation.
“Â鶹´«Ă˝Ół»is a phenomenal co-working market,” said Colin Scarlett, an executive vice-president with Colliers International, who is working with IWG to find new locations. “We’re a branch-office town, we’re not a head-office town, and as a result we’ve got a tremendous number of entrepreneurs trying to find really interesting space.”
Co-working providers are meeting the need with dynamic, finished space that removes the hassle small companies face when they’re trying to accommodate shifting space requirements.
“Spaces will be a vehicle for people to occupy expansion space and just space period as we have a run-up to the new construction cycle,” said Scarlett, who is working with Spaces. “Somebody needs to be a provider of new space on a shorter- or medium-term basis and a company like Spaces is going to win as a part of it.”
Berger said this can be good for traditional landlords, adding vibrancy to a building.
“Today, a co-working model like a Spaces or Regus is considered an amenity to the building,” he said. “It attracts people and attracts other tenants to the building.”
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Ross Moore, senior vice-president in the Â鶹´«Ă˝Ół»office of tenant representation firm Cresa Global Inc., isn’t so sure. Some landlords aren’t embracing co-working completely, he said.
“Don’t underestimate how concerned the landlords are about the tenant profile, because once a building has a reputation, it’s hard to change,” Moore said. “You want to set the tone early on. So the question is, do you want those co-working operators to set the tone of the building?”
Moore recently spoke with the development manager for a new downtown office tower who said he would probably turn down a co-working provider.
But if co-working providers sign a lease for 10 to 15 years, the appeal of that stability could be a benefit.
“We’re not creating big law firms anymore,” Moore said. “The banks have a fraction of the space they used to have.”
RBC is down to two floors and signage rights at Royal Centre, Moore said, while Ernst & Young Global Ltd., tipped as an anchor tenant in Oxford Properties Group’s planned 458,584 square foot tower at 1133 Melville Street, has reduced its space requirements to 145 square feet per person because more workers are exercising their ability to work remotely.
“It’s all going digital,” Moore said. “We don’t have a lot of large tenants, so when you’re trying to kick off a building or find that [office] anchor tenant, maybe this is the way forward.”Â
