Co-Working Boom Reflective of Fundamental Change in Mindset
Philippe Houdard, co-founder of Pipeline Workspaces
Explosive growth in demand for flex space accounted for nearly two-thirds of office market occupancy gains across the country in 2018, according to a recent report from JLL. Yet, shared space options represent less than 5% of total office inventory. In Florida’s fastest growing cities, flex space providers are actively working to close that gap.
Globest.com recently asked Philippe Houdard, co-founder of Pipeline Workspaces, to discuss the forces behind the growth in flex space in the Sunshine State and what it means for the future of co-working space here.
Pipeline recently expanded to Tampa and Orlando after successfully introducing its co-working concept in three Miami locations and a adding a fourth location in Fort Lauderdale.
GlobeSt.com: Co-working has been growing at an exponential rate across Florida in recent years. Is this momentum sustainable?
Houdard: We’re seeing a significant change in how businesses view office space. Companies need to be competitive, but lower costs and higher efficiency alone won’t cut it anymore. Almost any business needs to find new ways to be creative and innovate, and many are looking at shared workspace as a way to do this. It is clear to me that we’re still in the very early stages of this trend, as businesses shift from operating in isolated offices to moving toward community-based shared spaces. Couple this with the fact that, according to Forbes, Florida is home to eight of the country’s 25 fastest growing cities, and it’s obvious that demand for flex space here is just picking up steam. What we are seeing right now is just the beginning.
GlobeSt.com: Can the growth of co-working positively impact Florida’s economy?
Houdard: In the early days of co-working, many people considered shared workspaces as something that was exclusively for start-ups. But, when Pipeline Brickell opened in 2012, we expected the demand would come from all size companies and all sectors, and this has played out in the broader co-working landscape as well. We see many established companies take up flex space while testing a new market. Uber and Postmates have each placed small teams in Pipeline while expanding into new territories. Working alongside these large players are a multitude of small and mid-sized companies humming along.
One of the most interesting benefits of shared workspaces is that it fosters an exchange of ideas with people from different industries. We believe that companies working in this idea-rich environment are more innovative—and innovation invariably leads to the kind of job and industry growth that moves economies forward.
GlobeSt.com: JLL recently ranked Tampa and Orlando among the top 25 markets in the country for flex space. What is fueling Central Florida’s co-working boom?
Houdard: For starters, the economic growth in both of these markets is due largely in part to the types of dynamic and innovative companies that gravitate towards shared workspaces. Orlando took the No. 4 spot on Forbes’ “America's Fastest Growing Cities 2018” list, which is driven by population growth, employment, wages and economic output. Tampa Bay’s GDP growth in recent years has been at nearly two-and-a-half times the national average. The demand for flexible space in those markets has been growing along with the macro-trends, but until recently the providers just weren’t there yet. Pipeline was the first national co-working provider in Orlando when we opened in late 2017, with our Tampa location following about a year later.
GlobeSt.com: How do South and Central Florida’s co-working sectors differ?
Houdard: While all of Pipeline’s locations across the state have a versatile blend of companies that range the full spectrum of industries, we have seen some unique characteristics that reflect the broader trends of each respective local market. For example, in Orlando we have a number of clean tech companies, whereas in Miami we have many logistics companies focused on Latin America. In Tampa we have a lot of professional services firms, including attorneys, PR and technology. But overall, it’s that broad diversity within each location that is consistent and offers the true value.
GlobeSt.com: What should CRE professionals know about co-working spaces?
Houdard: While the overall demand in our industry is notable, it’s certainly not uniform. Different companies often have dramatically different needs when it comes to their work environment. For example, Pipeline is a higher-end concept, high-design and personalized to meet the needs of companies that require a higher level of professionalism and sophistication in their work environment. Meanwhile, we see some co-working spaces entering the market that take a different approach, promoting a more high-spirited and freewheeling vibe. As long as the company is clear on what its requirements are, they can more quickly find the appropriate space. Likewise, landlords looking to place co-working companies in their buildings should be aware of the general membership composite they will be accommodating.
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