JLL’s Scott Homa on the future of coworking

 

Scott Homa, Senior Vice President and Director of U.S. Office Research at JLL

Senior Vice President and Director of U.S. Office Research at JLL Scott Homa joined the GWA board in the last year, bringing perspective from JLL’s multifaceted involvement in the coworking industry (and adjacent industries) to the board.

JLL has been involved in a number of areas of the market that touch coworking, giving Homa a well-rounded point of view as he contributes to the board. They work with everything from investment groups to capital markets teams, property management, project and development services, and research and advisory groups.

His first exposure to the GWA, however, was only last year—at the annual conference. He said coworking quickly became both a professional and personal interest of his.

“I’ve been keeping very close tabs on this whole movement that we’ve seen, which has gained massive traction,” he said.

As coworking continues to evolve, Homa said he sees several key changes that are repositioning the industry, and he offered ideas on how to be on the front edge of those changes.

Fortune 500 Clients

From his position with JLL, Homa has been able to witness firsthand just how far coworking has gone in disrupting not just small businesses, but larger, Fortune 500 companies as well.

“There has just been tons of work in advising our Fortune 500 occupier clients,” Homa commented. He said JLL has been able to help them integrate into coworking spaces (or integrate coworking into their existing office space). Even though coworking has traditionally been associated with freelancers, Homa explained, it is becoming more and more attractive for Fortune 500 companies.

Coworking agreements for larger companies are a win-win scenario as well, Homa explained: the larger-scale agreements help coworking space operators quickly build their clientele, and Fortune 500 companies find they are able to enjoy the amenities as well as the sense of community that a coworking space curates.

Homa commented that the recent changes to accounting rules have brought more visibility into the liability that comes with having a long-term lease—especially for larger companies—which has offered yet another reason for Fortune 500 companies to turn toward coworking.

Fighting for Talent

Although we’ve spent years hearing about “work/life balance,” Homa said that’s actually not the trend anymore. Instead, more and more of the most valuable employees—and the employers competing for them—are looking for work/life integration.

Because service employees are increasingly expected to bring their work home with them, working nights, weekends, etc., the expectation is that employers will also try to make the workday more enjoyable on the other end.

“Kind of bringing some fun into the workplace,” Homa said. “You’re kind of staying within the office ecosystem for longer.”

Thus, more and more companies are trying to physically redesign spaces to make them more fun—offering more informal seating and living room type space as well as other amenities that make the office feel more like home. There is also effort to redesign the fundamental structure of the workday to include flexibility for more recreational activities like happy hours, catered breakfasts, jazz in the park, yoga classes, coffee bars, cycling classes, etc.

“All these things that people in the old days would kind of do as weekend or after work leisure activities,” Homa said. Now, they’re increasingly built in to a workspace.

As unemployment goes down and labor force constraints tighten, Homa predicts we will see these trends continue. The most in-demand employees—young, tech-savvy professionals—are increasingly expressing interest in these more engaging, entertaining, but still very prestigious workplaces—and the companies fighting to hire them are rushing to meet their demands.

“Companies are using office spaces as a weapon in the war for talent,” Homa said.

The rise of WeWork

Homa explained that one of his first hooks into following the coworking industry was watching the rise of WeWork, one of the first chain coworking franchises to target large companies with full floor or even full building build out packages and coworking leases.

“They were pioneers,” Homa said. From his perspective (outside the coworking world, at the time), he said he watched WeWork change the nature of real estate—something he’d never seen a company manage to do before.

“It’s changing real estate from a commodity into a consumer product,” he said.

“That scale didn’t exist before,” Homa said. He noted that while earlier global names like Regus had a wide-ranging reach, their target clients were still mostly independent contractors and small businesses, meaning that their spaces were modestly sized.

However, the opportunity to land these large-company clients has become a compelling value proposition for space operators—something Homa believes will continue throughout the next several years.

Small Operators and the Future of Coworking

What does this mean for small operators? Homa said the trend toward larger clients in coworking makes the hospitality-minded nature of coworking more important than ever before—especially for small space operators.

Considerations such as site selection—although already a nuanced and often difficult decision—is now more critical than ever. Especially for smaller brands, site location, street presence, and overall visibility can mean the difference between attracting a larger company to the space or not.

Great customer service is just as important, however. The sense of community and top-tier customer service remain key parts of the draw of coworking, so making sure staff is hospitable and well-equipped as well as focusing on social programming and other community-building events can be key.

As we make the shift from work/life balance to work/life integration, it is becoming more and more important to workers to have a space where that integration is an organic part of their workdays. Coworking is already on the cutting edge of offering this blend—and thus, the hospitality side of the industry will continue to remain crucial to successful spaces.

Scaling Coworking

As coworking continues to cater to larger clients, however, Homa said the spaces that serve them will also need to grow. During his first year on the board, Homa said he has found the GWA to be agile in its approach to the changing industry—especially in terms of trying to bring adjacent industries together in conversation about how to create the best spaces going forward.

Because of his work with JLL, Homa said he knows having many perspectives guiding decision-making is important. “There’s really no dimension of this industry that JLL would not bring some level of expertise,” he said.

Going forward, he said he hopes to see more and more institutional participation in the GWA, with other stakeholders—including (but not limited to) operators of large coworking brands—joining the conversation about how to manage the constantly changing sector and poise members for growth and success.

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