Elizabeth Steele, Esq. is a director at GRS Title. She can be reached at 804.486.9465 or via email at [email protected]
We’ve looked at the dominance of WeWork as both a coworking tenant and commercial real estate operator before, and the company keeps growing. Early this year it was reported that the firm, now called The We Company, has hit an annualized revenue of $2.5 billion.
For good reason, commercial real estate services want a piece of that success in the coworking sector. Last year CBRE launched Hana, its own version of coworking space. Hana is part of the CBRE Real Estate Investments business, which includes developer Trammell Crow Co. and asset-management arm CBRE Global Investors.
Now Hana prepares to make its debut after signing a lease for three floors in the PwC Tower in Dallas’ Park District. Trammell Crow and Metropolitan Life Insurance Co. are the owners of the building.
The Dallas venture is being billed as just the beginning of Hana’s growth. Andrew Kupiec, the subsidiary’s chief executive officer, reportedly said that it will hit 25 markets within about four years. By contrast, WeWork has 602 office locations in about 100 cities, so it’s going to be a long haul before Hana can catch up.
Overall the coworking sector of office space doesn’t seem to be slowing down at all. A JLL report said that flexible office has expanded 23 percent annually since 2010. It is also taking up about 30 percent of all office-leasing absorption. And co-working ventures are expected to make up 30 percent of all office space by 2030, up from just over five percent now, according to JLL.
Meanwhile, coworking isn’t just for small companies and one-person startups any more. Large companies are taking advantage of these flexible spaces. Apple, Microsoft and Facebook are among the mega corporations that lease in these facilities.
But despite the attention that WeWork and Regus get, the coworking industry is still very fragmented. An Allwork report said that the top 10 operators in the space only make up 34 percent of the total market, and single-city firms make up 93 percent of the industry.
The arrangement of CBRE running a coworking firm makes sense, if Hana proves to be a good operator. As a commercial real estate services firm that manages buildings for large tenants, it already serves the same functions on a broader level.
About GRS Group
GRS Group is a leading provider of commercial real estate (“CRE”) services worldwide. With offices across the United States, Europe, and affiliates around the globe, GRS Group provides local market knowledge with a global perspective for institutional real estate investors, occupiers and lenders worldwide. The GRS Group team has evaluated and advised on over $1 trillion in CRE transactions.
Through the company’s proprietary management process, Global Services Connection, GRS Group delivers an integrated suite of services including Financial Advisory, Transaction Management, Assessment and Title Insurance. We provide a single point of contact, capable of leveraging the GRS Group portfolio of companies and delivering customized solutions to assist our clients in achieving their investment goals.