BK Perspective Real Estate USA 2016

Perspective on Real Estate 2016 - U.S.
Office
sheets such as Amazon, Apple and Google. It is
creating demand for smaller spaces too, particularly
incubator and co-working offices such as WeWork,
which has been rapidly expanding. A culture of
collaboration and community is being fostered in
these spaces, which has only accelerated the demand
for the space and the expansion of the firms that seek
to provide it.
In mid-2015 Crain’s Chicago Business reported that
co-working spaces in Chicago had grown from three
totaling less than 150,000 sf in 2007 to 41 spaces and
nearly 870,000 sf in 2015. Co-working is not a big
enough trend to move the needle in most markets,
but it is clearly growing as more independent, often
technology-related firms emerge as the economy
expands. Beyond the basic characteristics of the
physical space, investors should acknowledge that
tenants also value the more flexible time and financial
commitment that such spaces offer. This flexibility
is an important consideration for young, rapidly
growing firms.
Understanding the nuances of how space is being
Fig. 4.10
Metro Office Market Performance
Demand Growth* (%)
9.5
8.5
7.5
6.5
Austin
San Jose
Y/Y Rent Growth >3.0%
Y/Y Rent Growth 0.0%-3.0%
Y/Y Rent Growth