This past week, the Atlanta Business Chronicle posted an article lauding the fact that a long time member of Atlanta’s office skyline, Colony Square, had signed a lease with a WeWork, a large national co-worker operation, for 3 floors in their 100 Building and that that operation would ultimately “bring almost 1,000 workers to the mixed use project.”
Being a slave to logic, I immediately thought back at the numerous opportunities that I had had over the last 45 years to visit this project and how difficult it had been typically to procure a parking space. Like most urban projects, Colony Square’s parking was built to accommodate a “float”, that being an average number of occupants at the buildings at a given time, rather than the actual number of desks located on the floors. In this case, the parking was designed to accommodate 2 spaces per 1,000 square feet where the actual occupancy was probably closer to 4 spaces per 1,000 square feet. Imagine my surprise to find that Colony Square was leasing space to a tenant whose population was 18.8 persons per 1,000 square feet.
Of course, WeWork does not expect 1,000 people to actually occupy those three floors at a single time. This is rather the number of people that, using their own “float”, they feel that they can accommodate on those three floors without forcing folks to sit in each other’s laps. With co-worker environments, people share chairs, desks, offices, conference rooms …. space. Some are virtual workers who never venture upon the premises. Some of the more traditional, executive office suite companies estimate that their effective occupancy is 1 person per 100 square feet. Still is this much less than the 18.8 per 1,000 (1 per 53 square feet) projected by WeWork at Colony Square.
CONDECO produces a sensor program (watch this video) that monitors that use of desks or workstations and even conference rooms to determine whether a company is getting its money’s worth out of its office facilities. This is the type of thing that should keep office building owners and lenders awake at night. This is one very big reason that, with very limited exceptions, there are no spec buildings going up in the Atlanta office market right now.
Does anyone fully understand the long term implications of this super-utilization of office space? No. But, if you are going to a meeting at Colony Square, better take the bus.