I have investments in Pittsburgh--about four hours from my home. I have assembled a group of properties, one of which is a former social club at a high traffic count intersection that I am bringing to vanilla box with new electric, HVAC, wall, insulation.... The finished product will be new 6,500 sf. open span space with steel beams and everything. I adjacent properties that can be developed into 50+/- parking spaces.
Pittsburgh is experiencing rapid economic growth and one of the drivers for this trend is growth in the technology sector creating increased demand for incubator and co-working space. This building is well-suited for this purpose but I am reluctant to use the space for that purpose. Co-working space is a business and not a simple landlord-tenant relationship, I would need to lease the space to an entity who would then run the business rather than the individuals occupying the space.
My question: Does anyone have experience in this sector? Are such tenants too risky to consider? Can I expect market rents? Is it likely that the tenant (the business) receives sustained support from economic development groups or VC investors, etc. Any insight would be appreciated.
I would be interested in hearing what others have to say on this. We are currently consulting on a redevelopment of a large hospital site, and one of the central pieces of our plan is to have a co-working/co-living component on the site. My experience with this sector is limited to the research that I've done for that.
We are going after large co-working/co-living companies like WeWork so we're not as concerned about risk, but I would imagine for the smaller spaces/companies that is much more of a concern. A smaller tenant might be able to receive support from ED groups depending on what programs your local ED agency offers. That's something that would vary by tenant. The same is true of investor support I would imagine.
I came across an interesting co-working wiki. It might be able to give you some more information on the sector.
Join the Largest Real Estate Investing Community
Basic membership is free, forever.