Rahul Raj, a coworking user at Spaces, poses for a photograph at his home in Toronto on Wednesday, September 4, 2019. When Rahul Raj was ready to move his small but growing business out of his home, he found a range of flexible options waiting for him despite Toronto’s tight office market thanks to a boom in co-working. The rapid rise of flexible office spaces, which provide a broadening range of workspace options with little commitment or up front cost, has meant both independent workers and entire companies can ramp their space needs up or down as needed more seamlessly than ever before. THE CANADIAN PRESS/Tijana Martin

Rapid rise of co-working providing needed space as big cities feel crunch

Co-working offices are helping to add capacity to the market

When Rahul Raj was ready to move his small but growing business out of his home, he found a range of flexible options waiting for him despite Toronto’s tight office market thanks to a boom in co-working.

The rapid rise of flexible office spaces, which provide a broadening range of workspace options with little commitment or up front cost, has meant both independent workers and entire companies can ramp their space needs up or down as needed more seamlessly than ever before.

This new real estate model comes about via companies that lease floors or buildings and then subdivide and remodel them to suit their brands. An increasing number of co-working companies are also working with building owners to share in the risks and profits.

Co-working is seeing huge growth in Canada as global market leaders like WeWork and IWG look to add floor space and fill a strong demand for smaller, more flexible office spaces in a real estate crunch.

Flexibility was key for Raj, who is working to add at least two more staff to his team of two full-timers and a few contractors at his 5&Vine firm that helps tech start-ups raise venture capital.

“Because it’s month to month, if our need changes, so too can our arrangement,” said Raj.

He was able to secure a space that had the right mix of design, light, bustle and location to fill the growing needs of the company thanks to a co-working company called Spaces.

“It’s hard to think of an alternative that has the same flexibility and economics. These guys can provide what I can’t access on my own.”

Canada’s flexible office market has grown from about 138,000 square metres (1.5 million square feet) in 2014 to over 562,000 square metres (6.05 million sq. ft) this year, according to commercial real estate firm CBRE Group Inc.

Toronto accounts for about half of that space, with more than 30 companies offering some sort of flexible office space including options for freelancers with children, women looking for a supportive environment, and large-scale, multi-floor options for major companies.

The growth not only responds to demands for more flexible space, but for any space at all as Toronto and Vancouver face unprecedented office space demand.

“We’re one of the tightest, if not the tightest, office market in terms of available stock in the world right now,” said Jon Ramscar, managing director of CBRE’s Canadian division.

IWG, which has about 279,000 square metres (three million sq. ft) of flexible office space in Canada, says it plans to double that in the next three years.

Co-working offices are helping to add capacity to the market in part by being more efficient with office layouts, as their revenue depends on how many people they can fit into a space.

A report by CB Insights noted that WeWork’s buildings average about 4.6 square metres (50 sq. ft) per person, compared with an industry-wide average of 23.2 square metres (250 sq. ft) for commercial offices.

The shrinking space is part of a longer-term trend, said Ray Wong, vice president at Altus Group.

“Especially in the last 20 years, the average square feet per employee that’s needed has been shrinking, and that’s based on technology and people multitasking and more flexible workspace.”

The efficiency isn’t just coming on a space per person level. Larger companies are taking advantage of the ease of adding office space by not leasing out the typical seven to 10 per cent extra space for future growth, said Wong.

Flexible offices, especially co-working spaces, also help businesses attract skilled employees who are looking for a more interesting and pleasing place to work, said Wong.

“The key challenge right now for companies, especially on the [intellectual property] side, is the ability to retain and attract talent.”

The tighter layouts at co-working spaces allows for more collaboration, while also avoiding the unused spaces of traditional offices, said Wayne Berger, CEO of IWG Canada and Latin America.

“There’s no doubt that we and our peers operate on a higher density rate than we would see traditionally.”

And while there are more people in the office, companies like IWG, which runs the Spaces and Regus brands among others, is also responding to the need for some people only to be in the office part time.

“Employees want the option, and the ability, to work wherever they want to work, in a productive office, at whatever time to get a job done,” said Berger.

For Raj, the model means he can provide full-time desk space for his team, while he is signed up to only be in the co-working space 10 days a month.

“I can be at the co-working facility, be at a client site, or choose to work from home, if that’s somehow conducive to the work that I’m doing.”

ALSO READ: Conservatives promise tax cut that they say will address Liberal increases

Ian Bickis, The Canadian Press


Like us on Facebook and follow us on Twitter.

Just Posted

NDP leader Jagmeet Singh to campaign in Port Alberni

Singh joins Courtenay-Alberni candidate for rally to kick off final weekend before election

Comox Valley Regional District agrees to Union Bay governance study

Process will consider whether community should convert services to the region

Betties face some bumps from Cumberland Rec Centre deal

Roller derby group gets hit with schedule changes, rental hikes as ‘team’ rather than ‘drop-in’ program

Infrastructure upgrades will mean truck traffic increase around 19 Wing Comox

Over the coming weeks and months, the public may see an increase… Continue reading

ELECTION 2019: Have Justin Trudeau’s Liberals really cut middle-class taxes?

Conservative Andrew Scheer vows to cut bottom bracket, NDP’s Jagmeet Singh targets wealth tax

Talk to your kids about vaping, B.C.’s top doctor says

B.C. health officials have discovered the first vaping-related illness in the province

Alberta truck convoy plans counter-protest at climate rally with Greta Thunberg

United We Roll organizer says similar protest planned for Swedish teen’s event in Edmonton

Scheer, Trudeau, Singh haggle over potential minority government outcome

If you believe the polls, it appears the Liberals and Conservatives are neck-and-neck

British family deported after ‘accidental’ U.S. border crossing

U.S. officials deny it was mistake, release video of vehicle crossing into Washington from Langley

Kamloops man hangs on to back of stolen truck as suspect speeds away, crashes

The pickup truck was seen leaving the roadway before bursting into flames

‘Sky didn’t fall:’ Police, lawyers still adjusting after pot legalization

Statistics Canada says 541 people were charged under the federal Cannabis Act between Oct. 17, 2018 and the end of the year

Fewer people prescribed opioids in B.C., but other provinces lack data: doctors

Patients who began taking opioids were prescribed smaller doses for shorter duration

Electric cello, stolen from vehicle in Williams Lake, returned to U.S. owner

Rita Rice of Texas said she and her husband had given up hope of ever seeing it again

Most Read