Coworking & Flexible Office Space

Cap Rates Impacted by Coworking Occupancy Sales of Buildings with Coworking Space Occupancy (Q1 2016 - Q1 2018)

125

100

75

50

25

0

-25

-50

-75

-100 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Difference in Sales Cap Rate vs. Benchmark % of Building Occupied by WeWork (at time of sale) % of Building Occupied by Coworking Space Provider (at time of sale)

Represents individual sale

Source: Real Capital Analytics; Cushman & Wakefield Research

Investors have been giving a cap rate premium for buildings with a cowork space provider occupying a third or less of the building. However, as the proportion of the building leased to a cowork space provider increases, so does the gap between the building’s sale cap rate and the cap rate benchmark for other sales in the same submarket.

Coworking and Flexible Office Space

17