Surprise! Coworking Does Not Erode Property Values

Julie Whelan

There has been anecdotal evidence that commercial real estate investors grew more cautious about an office building if there was a high concentration of coworking space in it. New research from CBRE presents a more nuanced picture of this question but basically arrives at the conclusion that investors tend to be less sensitive to higher concentrations of coworking than previously thought. And in fact, in some cases presence of flexible-space tenants–and the building improvements they initiate–may benefit overall property values, causing some lower-classified buildings with flexible space to perform as if they were Class A assets, according to Julie Whelan, CBRE Americas Head of Occupier Research.

It is a welcome data point to a growing question in the industry, which is how to value buildings when there is a coworking component to it.