According to CBRE, while commercial real estate investors generally take a positive view on co-working, maintaining a balance of traditional and co-working 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 a co-working occupancy of a third of the space or less, with a qualified operator, supports a healthy capital value.
“Co-working has captured the attention of both occupiers and investors and continues to gain traction in commercial real estate,” said Scott Marshall, Americas President, Advisory & Transaction Service and Investor Leasing, CBRE. “While many investors are deciding how to participate, in general, investors have concerns that if co-working 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 co-working is accretive to asset value,” added 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 co-working operator is seen as an amenity by investment grade tenants who continue to desire traditional lease terms. Further, a growing number of tenants view co-working space in a building as an option for periodic spikes in occupancy demand.”