Page 10 - 2019 Colliers Forecast Book

10 Colliers International | West Michigan

Offi ce space as an investment has always been risk and reward. As trends of
open-offi ce, coworking, evolving retail co-tenancy, and increasing amenities start to
characterize offi ce buildings, functional obsolescence has become a reality. Some
building owners have invested in updating buildings to meet current demands, but
not all are able to do so. In this competitive landscape for working talent, companies
are increasingly interested in space that will differentiate themselves and be more
attractive to employees. In 2019, we see this movement continuing to increase.

Coworking is another trend to keep an eye on in 2019. On a national level,
an estimated 55 million square feet of space is occupied by coworking space.
Coworking space is offi ce space that is leased out to individuals or a small group
who desire a small or fl exible space, often on a short-term basis, without signing a
master lease. There are currently at least 10 coworking locations in Grand Rapids,
and this number could grow in 2019.

Five Coworking Trends for 2019

• Technology: Access cards, space management software, room booking View from 150 Ottawa Avenue SW
systems, time trackers, and lower staffi ng overhead allow for almost full-time Warner Tower
access in some cases.

• Coworking Programs: Multiple coworking companies participating to allow
users to subscribe to and utilize various companies at various locations.
• Space Design: Design continues to become more engaging and inviting,
adding to the allure of these spaces.
• Additional Services: Baby-sitting, dog-sitting, yoga classes, and relationships
with other providers like banks and accounting fi rms increase the benefi t.

• Corporate Buy-in: Coworking had been primarily used by free-lancers,
solo entrepreneurs, and start-ups, but now larger corporations are exploring
coworking spaces for their employees to offer fl exibility.

There has been some tenant movement over the past year, and we expect a
continuation of this theme in 2019. Companies like Chemical Bank and Van Wyk Risk The overall vacancy
Solutions – both joining law fi rm Warner Norcross and Judd, LLP in the new Warner and absorption trends in
Building at 150 Ottawa Avenue NW – as well as insurance company Acrisure,
and accounting fi rm BDO all made notable moves in 2018. Law fi rm Bodman PLC Grand Rapids are very
secured a long-term residence at 99 Monroe Avenue NW and Lighthouse Insurance
leased 30,000 square feet on Grandville Avenue downtown. In the suburbs, Keller similar to what we are
Williams Realty East moved their headquarters from 630 Kenmoor Avenue SE to seeing nationwide.
1555 Arboretum Drive SE in Cascade. Many companies are looking for space,
but quality options are becoming somewhat limited. New construction is a natural
solution. However, cost of construction continues to climb, so while many offi ce users
desire to own, building new has become a challenge. We continue to benefi t from
investment and commitment to the community, something that helped insulate us
from the previous downturn, and something that has propelled us to where we are
now.