It’s no secret that office space in Toronto is in high demand and expensive. And prices for commercial space in Canada’s largest city are only going up. In fact, a new report suggest commercial tenants in Toronto could face massive rent increases of up to 50% over the next three years because of rising property values.
Toronto is now the most expensive city in Canada to rent office space, at $59.17 per square foot. While still reasonable compared to places like New York ($84.91 per square foot), rising rental costs in Toronto will likely start to price businesses out of the market. This is making the case for more companies, specifically entrepreneurs and startups to consider coworking spaces when budgetary restraints make individual office leases unrealistic.
In fact, coworking spaces provide the same kinds of spaces in the same city for much less, generally around $500 per month. That’s a significant cost advantage for businesses that need to slash overhead costs but still want to work in the heart of the action.
Entrepreneurs with hustle and ambition have become flexible and creative to survive and thrive with limited resources. More companies are beginning to understand the benefits coworking spaces can provide because, in many ways, executive office rentals provide the same if not better services and amenities as having your own office, but at a fraction of the cost.
Coworking provides people with a hot-desk, where multiple people will use a single workstation at different time periods or a dedicated desk in an open and collaborative environment. While rooted in the technology, startup and freelancing communities, co-working is growing rapidly among businesses of all sizes who are now recognizing the value in the practice’s flexibility, community and shared resources.
A Mecca for Business and Growth
A study conducted by researchers at Cresa found that shared office space could account for nearly 20% of all commercial office real estate market in Canada over the next ten years. Coworking spaces have become hotspots for gig workers and startups, choosing to leverage an open environment that naturally encourages collaboration and idea generation over individual workspaces.
Office Space, Shared
It isn’t just tech savvy startups seeking out these alternatives to traditional office spaces. Companies and businesses of all sorts and sizes are recognizing the benefits of coworking spaces for a number of reasons, including reduced stress on financial resources to improve their bottom line and allocate other resources more effectively.
Experts believe more companies, even larger ones, will begin to suggest and even use these shared office spaces and virtual offices more than ever in the past as the economy continues to grow. More people are choosing to work in the gig economy as freelancers and contractors, and they represent a significant opportunity for companies looking for top-notch talent but might not be in the market for a full-time employee. Coworking spaces are great places to foster these kinds of relationships, where strategic partnerships are forged quickly and efficiently.
Diverse Ecosystems of Idea Generation
The coworking space has grown to become an incredibly diverse ecosystem, capable of handling the growing demand for flexible and efficient work environments that are more affordable. The rate at which office space rentals costs are increasing will continue to alienate blossoming entrepreneurs from entering the commercial real estate market, but that’s a good thing. Coworking spaces encourage more collaboration and idea generation, and that’s good news for everybody, including the economy.