Retail and shopping mall investors across the country are giving office users a new place to work. A recent report by JLL notes that over the next 10 years, flexible space will make up nearly one-third of all office stock – and retail investors are doing what they can to grab their market share today.
Here’s why coworking and flexible office spaces in retail storefronts and malls is a trend that’s just beginning.
There Is Plenty of Retail Space Available
JLL estimates that flexible office coworking space in retail properties will grow 25% annually over the next few years. That’s good news for owners of retail property and shopping centers with a lot of retail space for lease.
Large retail operators such as Toys R Us, Sports Authority, and Bon-Ton are just a few of the national brands that have recently pretty much gone out of business. Established names like Sears, J.C. Penney, Macy’s, and Hudson’s Bay continue to downsize. Add to this mix the negative impact e-commerce operators are having on the demand for brick-and-mortar retail space.
The end result is that there’s plenty of retail space available in both urban and suburban locations to be converted into flexible office space.
How Is Retail Space Customized For Different Coworking Uses?
JLL surveyed 75 coworking spaces in retail centers and identified four distinct types of use:
Retail Launchpads target retail start-up businesses by offering retail incubation and demo space within upper-income malls and retail locations.
A prime example is Cowork at the Mall at Chicago’s Water Tower Place. The 15,000 square feet of mixed-use space in this retail incubator features coworking space, event, and merchandising space and is home to both designers and inventors.
Set up as telecommuting locations, Telework Hubs represent about 78% of the flexible office locations. They’re found within all types of retail property and in a variety of markets with both high and lower-income consumers.
Union Cowork in California is a great example of a Telework Hub. Both locations of this coworking operator in San Diego are located in easily walkable, retail-rich environments.
Business Booster coworking retail locations are found in both urban areas and the suburbs. They’re specifically targeted toward solopreneurs and offer business development services such as venture capital, consulting, continuing education, and mentoring opportunities.
CTRL Collective is one example of a Business Booster. Located in Pasadena, Calif., CTRL offers services to its members along each stage of business development. But CTRL isn’t just about work: Collective coworking space is pet-friendly, has recreation rooms, and valet parking for members and guests.
Creative Coalitions aim heavily at millennials, currently the most powerful group of consumers. This millennial member base creates an extra potential business boost for in-space retailers and neighboring stores and restaurants.
Creative Coalitions are located in middle and top-tier retail centers in both urban and suburban locations and provide space for creative users. For example, coworking company Spaceus in Boston locates in vacant retail storefronts and combines coworking office space with retail showrooms and performance space.
Staples Studio: Office Supplier Turned Coworking Operator
Recently, office supply retailer Staples announced the launch of Staples Studio, offering coworking space inside Staples retail stores. Originally launched in Toronto, Canada, Staples Studios is currently available in three Boston-area locations: Danvers, Brighton, and Norwood.
Staples Studios offers users flat-fee pricing for both shared workspace and private offices, plus a 10% discount on all in-store purchases of office supply products Staples sells.
Staples Studio members receive the usual coworking perks such as speedy Wi-Fi, free coffee, and unlimited meeting room space. But Staples is also setting a great example of how retailers can leverage their products and services by offering them free to Staples Studio members:
- Podcasting studio
- 500 color business cards
- Unlimited black & white printing
- Total access to all Staples Studio locations
- TSA Pre✓® enrollment
- Free parking
Flexible office space services and extra perks like these offer additional revenue streams for Staples and help increase the satisfaction of its Studio members. It’s a win-win for both Staples and Staples Studio coworking users.
A Quick Look At Flexible Offices In Retail Space
Key takeaways from JLL’s Retail Research Point of View 2018 report include:
- Coworking space in retail properties is predicted to grow at an annualized rate of 25% over the next few years.
- Flexible office space in retail locations will reach 3.4 million square feet by 2023.
- Middle and top-tier retail properties in areas with above-average household incomes are the most targeted for coworking space use.
- Nearly 55% of retail coworking spaces are located in suburban locations.
- The walkability of the neighborhood is an important factor in transforming retail space into flexible office use.