One of the Chicago tech scene’s biggest challenges has been competing with the coastal cities for venture capital funding. Local Investors place a stronger emphasis on business fundamentals and startups have to stretch their resources to thrive.
The increasing office rents in tech-favorable submarkets driven by the industry’s appetite for creative office space mean tech firms in Chicago must be more efficient with the investment capital. Here’s why coworking could be the answer.
Welcome to the sharing economy
The notion of sharing is catching on globally. From sharing major life snapshots on Instagram to daily updates on Twitter, sharing was bound to infiltrate the workplace. Across several sectors, the sharing economy is transforming how people view the ownership and leasing of spaces and services.
Coworking spaces are modern-day country clubs, replacing a musty, traditional members-only atmosphere with a swanky hotel vibe offering artisan coffee and cucumber-infused water the minute you walk in.
Unlike long-term leases, with coworking you pay as you go for what you need. Desks range from $150 to $450 per month, including services such as reception, printing and Internet. Additional perks include discounts on health insurance, video games, snacks and happy hours, similar to those at large tech companies.
The ultimate provider of flexibility, coworking works well for companies with uncertain growth trajectories, large firms in transition during a build-out or those looking to test the waters in new markets.
After testing out a month membership to WeWork, JLL Research share their observations above. Coworking’s growth in numbers and global success centers around one uniting and unquantifiable perk–a sense of community. People thrive having others around them creating an invigorating work experience.
“Coworking spaces can be like live versions of LinkedIn,” said JLL Director of Research Christian Beaudoin. “You meet new colleagues, collaborate and share ideas.”
The team’s experience at WeWork helped explain the meteoric rise of coworking and why Chicago landlords now view these spaces as potential anchor tenants rather than fringe occupiers. The question remains whether the rapid growth can be sustained in an economic downturn, but for now, workers are winning with the wide range of choices that coworking provides.
The road less traveled
Less than a quarter of all coworking spaces can be found in Chicago’s Central Business District. That’s because tech companies are open to change and prepared to support a wide range of work styles.
Some companies like large-floorplate campuses to get everyone under one roof and boost productivity; others lean toward urban vertical campuses to attract young talent. Fixated on metrics and disruption, tech wants real-time building data and is questioning how buildings work. That means rethinking their performance and exploring both the location options and innovation capabilities of their coworking spaces.
As tenants continue to prioritize sustainability, wellness, loft-like spaces and transit-friendly locations, expect coworking spaces to branch out and explore mixed-use real estate in emerging submarkets such as Fulton Market, River West, Goose Island and the Clybourn Corridor.