Tenants Starting To Demand Flex, Coworking Spaces In Their Office Leases
Flexible work environments are seen as one of the keys to getting workers back to the office in Atlanta, which is why some tenants are adding coworking space usage into their overall leases.
"We have our first two [requests for proposals] that require coworking,” North American Properties Managing Partner Tim Perry said during Bisnow's Atlanta office event last week. "I think it's here to stay."
North American Properties is in the process of a $400M redevelopment of the multi-tower Colony Square complex in Midtown, including 940K SF of office.
The shift back to the office in Atlanta has companies analyzing just how they plan to use their office space moving forward, with an eye to keeping employees happy and wanting to return to work.
A big part of that conversation is exploring how to add flexible offices, a number of panelists at the event said, whether internally or seeking to use coworking spaces on their properties as an option for employees.
Already, Cooper Carry has removed 25% of the workstations at its Atlanta office at One Ninety One Peachtree Tower and replaced them with flex environments, partner Bill Halter said during the event. The Ardent Cos. CEO Matthew Shulman said one tenant in a Nashville building it owns offset a portion of its office space with a coworking operator in the same building.
“What we're experiencing is when our customers walk through that building, and they see the social workspace we have there off the lobby, there is a lot of time spent there in that space,” Hines Senior Managing Director John Heagy said.
Amenities like fitness centers are not as high on the list of important office building features anymore, Heagy said. A focus on flexible space and hotel-like services in office buildings has become paramount for companies as they continue to fight to attract and retain talent, Heagy said.
“I think we're in for a very long haul of a serious change,” he said.
Smallwood principal Amanda Wing said the architect firm's clients are focused on wellness, increasing employees per square foot and flexible office space. Wing said workers are coming back to collaborate, for mentorship and to interact with each other, not to work alone in an office.
“Most people who are coming into the office are coming in for a meeting for one to two hours,” Wing said. "They don't want to have to go back to their office on the 15th floor to get that heads-down time that they had when they were at their home previously. So having those breakout spots is even going to become more crucial."
Shulman said he sees companies adding coworking space requirements in their overall leases as a trend that will gain momentum, and it means landlords with coworking options in their buildings may be given preference.
“I think renting office space just because we're well-priced and well-located, I think those days are in the rearview mirror,” Shulman said.
“The reason people go into shorter-term space is because it's shorter term. I think that's the driving factor,” CP Group partner Chris Eachus added. CP Group is the new name for Crocker Partners.
“It really wasn't about the beer tap or events" that made coworking take off, Eachus said. "It was because you can sign a 30-day lease in a nice environment that looks professional, and you can come in every day and be happy with where you work."
