One of North America’s largest property owners says the growing popularity of shared office spaces can inject youthful energy into traditional office towers and give hope to struggling communities.
“It kind of moves you away from your father’s office building and brings a younger and more millennial-focused workforce into a complex,” says Jonathan Pearce, senior vice-president of office leasing for Ivanhoe Cambridge, the real estate subsidiary of Quebec’s pension fund manager.
He believes the spaces could also help to alleviate the high vacancy rate in Calgary’s real estate market by giving a low-cost option to new entrepreneurs who are seeking a fresh start after losing their jobs. Ivanhoe Cambridge has rented space in its Place Ville Marie complex in Montreal’s downtown core to WeWork, one of the world’s largest co-working providers. Pearce says the service has been a draw for potential tenants and not a threat to its main long-term customers.
Over the past five years, the strong growth in Montreal’s startup tech sector has helped to propel a six-fold increase in the number of new co-working spaces. In addition to modern buildings, chic spaces have opened in a shuttered Royal Bank branch in Old Montreal, old factories and abandoned churches.
For Alberta companies that are struggling amid economic uncertainty, Pearce says, an attractive feature of using shared office spaces is its flexibility. Instead of long-term leases, co-working spaces as small as a desk are typically rented out by the month, giving entrepreneurs access to a community of like-minded people with similar drives and big dreams.
A similar demand surfaced in the United States after the 2008 financial crisis when there was a large surge of independent contractors, flexible workers and small businesses, said Wayne Berger, vice-president of Regus Canada. The workspace provider has 11 co-working locations in Alberta’s two largest cities and 102 across the country. “People decided to start something new and put the power of their future into their own hands,” Berger said from Toronto.
Berger expects the number of co-working style facilities should double in Canada in the next few years to reach about 400 to 500, and surpass 27,000 around the world by 2020.
Crew Collective & Cafe co-founder Mikael Cho says the growth is being fuelled by a shift to a gig economy with its increased use of freelancers and contractors. While advances in mobile technology allow people to work from home or a coffee shop, having access to a network of flexible office spaces exposes creative minds to “serendipity:” the chance to run into like-minded people who may spark a collaboration or even business transactions. “That’s the thing that makes innovative cities really great,” he said.
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Anyone can use the meeting space and pay for private rooms by the hour or join specialists in virtual reality and artificial intelligence who pay up to $500 a month as members with assigned desks, office support and access to special events.
Demand was so busy at WeWork’s first Canadian location, that it doubled the size of its Montreal office and after less than a year of operation and is about to open a second spot near the home of the Montreal Canadiens that also has the capacity to accommodate about 1,200 tenants. “The more you’re with people who are doers, the more expansion (of business opportunities) occur,” says Marta Gonzalez, community manager for WeWork in Montreal.
At 66, Georges Renaud admits he sticks out in the WeWork office surrounded by much younger entrepreneurs in tech or professionals like lawyers and accountants. “It’s brought the millennial out in me,” the commercial real estate broker with Coldwell Banker said.
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