While commercial real estate investors generally take a positive view on coworking, maintaining a balance of traditional and coworking space in a building is critical when it comes to creating long-term capital value. Based on CBRE’s 2018 Americas Investor Intentions Survey, investors say that a coworking occupancy of a third of the space or less, with a qualified operator, supports a healthy capital value.
“Coworking has captured the attention of both occupiers and investors and continues to gain traction in commercial real estate,” says Scott Marshall, Americas president, advisory and transaction services|investor leasing, CBRE. “While many investors are deciding how to participate, in general, investors have concerns that if coworking comprises more than a third of the rent roll of an asset, the long-term capital value could be negatively impacted.”
“Investor views continue to evolve with regard to whether coworking is accretive to asset value,” adds Chris Ludeman, global president, capital markets. “Buildings that attract the best tenants command the highest rents and valuations, and there is evidence that a best-in-class coworking operator is seen as an amenity by investment-grade tenants who continue to desire traditional lease terms. Further, a growing number of tenants view coworking space in a building as an option for periodic spikes in occupancy demand.”
According to CBRE’s survey data, industrial will continue to be the preferred property sector for 2018, although interest in retail was up year over year.
