To survive a COVID-19 economy, coworking companies are relying on various strategies to help them withstand the storms brought on by the pandemic.
A recent report from Cushman & Wakefield notes that at the end of Q2 2020, the vacancy rate for all office spaces in the Dallas market was 19.4 percent, an increase over the 18.6 percent forecast for the period prior to the pandemic. Vacancy rates for subleasing in the market accounted for 1.3 percent of total office vacancies, a lower percentage than during the 2008-09 Great Recession (1.4 percent sublease vacancies), and the dot-com recession in the early 2000s (4.1 percent sublease vacancies).
The bad news for coworking spaces in 2020 went beyond stay-at-home orders. Freelancers and small start-ups were more likely to terminate their coworking leases or ask for rent relief.
But the report also had some good news, noting that negative impacts to the broader office leasing market can make short-term leases in coworking/enterprise spaces more attractive to corporations.
For example, VariSpace Southlake recently signed a short-term leasing deal with Microsoft, which was looking for temporary space to accommodate growth while the company updates its existing Las Colinas campus. Microsoft is expected to take on 82,000 square feet in the 305,000-square-foot facility. The former Vista at Solana campus sat vacant for 11 years before VariSpace purchased it last year.
VariSpace Southlake is one of two coworking locations (the other is the fully leased VariSpace Las Colinas) owned by Coppell-based Vari, makers of the VariDesk.
The report also identified a paradigm shift, with coworking companies transitioning to property management.
Common Desk recently went in on this trend, becoming an operating partner at the circa 1888 Continental Gin Building in Deep Ellum, offering design services, furnishings, marketing, leasing support, and property management.
Common Desk founder and CEO Nick Clark, who launched the coworking startup out of Deep Ellum in 2012, said, “We’re incredibly excited to play a bigger role in the neighborhood as an industry innovator. It’s truly going to be a holistic offering the market has yet to see.”
Other local coworking firms also are expanding during the wearying gauntlet that is 2020.
The Cushman & Wakefield report discussed the suburbanization of the workforce that accelerated with the pandemic as people seek more room to roam. Coworking companies that offer suburban spaces can take advantage of that trend.
One is WorkSuites, a Dallas-based flexible office company that in June opened its 20th location with an almost-20,000-square-foot space in Allen, across from retail-and-apartment-focused Watters Creek. The facility includes 85 individual private offices and some common areas that still allow for plenty of social distancing.
Venture X took a different approach and is expanding in Dallas, adding a tenth location at the Braniff Centre at Love Field. Its 22,000 square feet of office space should be available in early 2021.
A version of this story first published in the Fall 2020 edition of the Dallas-Fort Worth Real Estate Review.
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