The co-working trend, popularized by startup businesses like WeWork Cos., has been attractive to entrepreneurs and small companies looking for communal office space and short-term commitments.
But it could turn out badly for landlords, according to a new report from Green Street Advisors. The report predicts co-working will detract from cumulative office demand through 2030 by about 2% to 3% as the shared working space approach spreads from small businesses to large ones.
“A modestly negative impact on office demand and values seem a fair betting line today,” said the report released Tuesday.
The report estimates there will be about 14,000 co-working locations world-wide by the end of this year, compared with 600 in 2010. WeWork alone has more than 20 locations in London and is now among New York’s largest office tenants, it says.
Initially many landlords have benefited from the trend because co-working businesses have had healthy appetites for space, according to Jed Reagan, a Green Street analyst. There is also a chance that co-working could wind up being positive for office building owners as a growing source of demand, he said.
“Folks that previously were working in coffee shop or their living rooms have been brought into office buildings,” Mr. Reagan said.