Open desk coworking in Hampton Roads is among most expensive in US, study says

Hampton Roads is relatively expensive when it comes to paying for open workspaces in coworking facilities, according to a recent study by Coworking Cafe.

Still, the region is relatively affordable when it comes to dedicated desks in coworking facilities and virtual offices, according to research from the online platform for booking coworking spaces.

The region’s median price of $225 per month for open workspace ranked as the second most expensive of U.S. metropolitan areas, according to the study. Inland Empire, California, and Albany, New York, tied for first place with a median cost of $250 for open workspace subscriptions.

Fourteen metro areas, including Philadelphia, Las Vegas, and Silicon Valley, California, matched for the lowest median price at $93 per month.

Open workspaces, also known as open desks or hot desks, are commonly used by small-business owners, entrepreneurs, freelancers and remote workers looking for a collaborative and cost-effective work environment.

Dedicated desks guarantee a worker a more consistent working environment with a permanent workspace.

In Hampton Roads, dedicated desks are among the most affordable, costing $277 per month. In Santa Barbara, California, dedicated desks ranked the most expensive at $475 per month.

Virtual offices, ideal for remote or traveling workers, provide a business address, phone and fax number, mail and package handling and may include access to amenities.

When it comes to virtual offices, Hampton Roads is average with a cost of $95 per month. Austin, Texas, offers the lowest prices with a median of $48 for its virtual offices.

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It boils down to supply and demand

It is all related to supply and demand, said Rob Wright, senior vice president with Cushman & Wakefield | Thalhimer leading the Hampton Roads office team.

Wright has done a number of coworking deals in the region throughout the years and anticipates a lot more coworking spaces coming out of the ground in the future.

But, referencing coworking as any kind of shared space or flexible office environment, Wright said Hampton Roads doesn’t have a huge supply of coworking spaces like other markets, and that lack of inventory and supply has driven pricing up.

“In general, in the Hampton Roads market, we have not had vacancy rates in most of our submarkets for landlords to be hungry enough to do coworking deals,” Wright said. “They take big build-outs to build, and we’ve had plenty of other demand from just direct users in a lot of our submarkets.”

The most growth for coworking space has been in downtown Norfolk, Wright said.

“Which correlates with downtown Norfolk probably having some of the higher vacancy rates of office space in the entire Hampton Roads market as far as submarkets go,” he said. “And that’s where the glut of coworking space has been built, and that’s where the demand for coworking space is probably lowest.”

Wright said he just completed a 20,000-square-foot deal with Venture X, a coworking franchise, in the Greenbrier section of Chesapeake, and demand is expected to be extremely high.

He also pointed out that the Gather in Virginia Beach’s Town Center has a much higher occupancy than the one in downtown Norfolk.

“Because they just have a lot fewer coworking competitors in this submarket, and there’s a lot higher overall demand for office space,” he said.

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Prices may vary based on amenities

Kathleen Mann, regional director for Gather, said many building owners offer coworking as an option to complement the primary function of their spaces and therefore only charge a small fee for their use.

“At Gather, we are driven to create world-class workspace and exceptional member experience often not included elsewhere,” she said.

Membership options for Gather include 24/7 coworking at $250 per month, virtual offices at $65 per month and dedicated desks at $350 per month.

While there are other equally as impressive coworking spaces within the region, Mann said she doesn’t feel the study adequately defines the parameters of what coworking can be.

“When comparing Gather to competitors that offer a similar product, we often find that our pricing is actually lower,” she said. “In fact, many of our members who have relocated to the 757 from larger cities speak of how much money they are saving with us.”

Mann said each of Gather’s locations in Newport News, Norfolk and Virginia Beach offers approximately 30,000 square feet of class A office space, are staffed with full-time community managers and include a variety of amenities, such as copying, printing and shredding along with weekly events and daily happy hour.

Gather’s Norfolk location offers panoramic views of the downtown Norfolk waterfront, wellness room, podcast room, local coffee and beer.

“Gather is so much more than just a place to get work done,” Mann said. ”We believe that the communities we create help our members build on their existing brand and develop lasting and strategic partnerships in the regions where we also work and live.”

Sandra J. Pennecke, 757-652-5836, sandra.pennecke@insidebiz.com