Why is Office Sharing in Vogue?
Office sharing is a growing trend. Let’s find out why.
With office prices soaring, startups are finding new ways to cover the cost of doing business.
We’ve seen an explosion of growth in collaborative work spaces over the past few years. There are over 7000 coworking spaces across the globe as of this year—not bad for an industry that barely existed before the mid-2000s. While WeWork is certainly the most infamous coworking space, plenty of smaller, independent spaces exist all over the world. For startups, freelancers, and remote workers, coworking solved the problem of the long-term lease and the wallet-lightening monthly rent.
With the rise of Airbnb in the late 2000s, it was only a matter of time before individual companies embraced the communal workplace. Nowadays, shared offices are such a mainstay of startup life that companies are more eager than ever to push the industry forward. We are one of them, of course. If Airbnb brought apartment sharing out of the Craigslist era, then companies like Share Your Office are dragging office sharing along too.
For workers seeking cheap office space, the shared office boom is a gift. This is as true for startups as it is for the 34% of American workers who operate remotely. Private offices aren’t feasible for consultants and freelancers who work independently. Ignoring the fact that working out of a single-person office is depressing, it would still take a lot of income to offset the overhead. The value that a private office space offers isn’t likely to match its cost.
According to calculations by TheSquareFoot, $5000/month would net you a 921 sq ft office in San Francisco, on average. That works out to around $5.43/sq ft. In comparison, some of our most expensive listings in SF are going for $5/sq ft at most, with many dipping as low as $2.50/sq ft. It’s often beneficial to share an apartment if you’re living in an expensive city; in today’s market, the same goes for office space.
Price isn’t the only factor pushing startups toward shared offices and coworking spaces. If it were, we’d see more of an exodus to the suburbs and second-tier tech hubs, instead of a growing demand for cheap workspace in the city.
In a big way, startups want shared offices for the community. Coworking spaces do a good job of selling this angle, and it empirically seems to be true. In a global survey by Deskmag, 30% of respondents indicated that they felt “strongly” connected to their workplace, and over half of the respondents were willing to leave their phones out on their desk while walking about, out of trust for their peers.
This is consistent with our findings, as summarized by Bisnow. In our small-scale survey, we found that community was the most important factor for entrepreneurs searching for a communal office space, with location trailing closely behind. Business owners are willing to pay a little bit extra for an office that’ll provide greater value.
What’s more, shared offices offer a cure to an oft-overlooked problem that every tiny startup faces: loneliness. It’s incredibly isolating to work 10+ hours a day on a product with only one or two other team members, even if they’re your friends. Not only that, but it’s myopic; how much can you really understand about your business when you’re staring at it from an inch away?
Social interaction gives you a breath of fresh air, and it helps you see the big picture behind the minute details you’re poring over. Sharing an office with another company might not grant you the perks and comfort of a coworking space, but it does put you in close proximity with a team that you can learn and grow with. If you’re the only two companies around, it’s only natural that you’ll ask one another for advice.
Putting all of this together, it’s easy to see why the shared office market has boomed in the past 10 years. Future growth certainly looks promising in the Bay Area, with housing prices on the rise and VC deals on the fall. Evidence shows that coworking spaces fare well during recessions, and we’re in a bit of a startup recession. Startups can’t afford to spend lavishly on private offices, and I won’t be surprised when the sublease listings start popping up on Craigslist.