According to recent surveys, 44% of corporations are already using flexible office space and 65% of companies expect to use co-working as part of their office portfolio by 2020. What is driving this trend? First, the shared office space can keep cost lower. Perhaps more importantly, shared space gives companies the ability to more easily flex their workforces during times of growth and downturns, and it offers large companies access to cutting edge technologies and top talent at startups. Many also prefer the flexible and open layout design as it spurs collaboration and innovation.
Several datapoints show how strong the trend is. WeWork has a valuation of $20bn. Many other companies have gotten involved in the space because demand is so strong. Other shared office space companies include IWG (formerly Regus), Galvanize, Alley, and Rise to name a few.
Companies are not only looking to add shared office space but they are also partnering with companies that offer the space. IBM is one company that is very involved. In April of last year, IBM agreed to occupy an entire WeWork building to house 600 employees. IBM is also partnering with coworking operator Galvanize. Microsoft and IBM givs their employees access to WeWork locations. Last year, Verizon partnered with Alley to open new locations in New York, Cambridge and Washington, D.C. in hopes to benefit from networking with entrepreneurs.
Castle Placement is an investment bank (founded in 2009) that raises equity and debt capital for companies in a variety of industries from our institutional investor network. Castle Placement’s proprietary app, CPGO, connects companies with investors in real time. It has over 64,500 private equity, venture capital and strategic investors, family offices, pension funds, foundations, endowments, sovereign wealth funds, hedge funds and lenders.