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2 Stocks for Investing in the Coworking Revolution

2 Stocks for Investing in the Coworking Revolution

Story Highlights:

  • Conventional office workspaces are going the way of the fax machine, as the growth in shared coworking spaces is heating up — rising 1,000% in the past decade.
  • Here are two surefire ways to buy into the trend.

A few years ago, I worked for a company that had to change offices, and I was asked to handle the move.

I probably spent 20 hours walking around New York City with our broker, checking out our options. I evaluated rent, calculated moving costs and renovations, negotiated with landlords and settled insurance and legal matters.

We were a small company with a reasonable but tight budget. Every office had quirks — some good, some not. But after long deliberations, we finally decided on a space.

It was a complicated process. We were only allowed to move on certain days and at certain times. Our team’s keys and building passes weren’t available for nearly a week after the move — for reasons I still don’t understand.

A few weeks after we moved in, I went for a beer with the CEO. It was nice to have our own office, but he told me that he had come around to an alternative that I’d recommended before the move.

“You were right,” he said. “We would have been financially better off and had a lot less aggravation if we had just gotten a WeWork.”

Working at a WeWork

WeWork — or The We Company, as it’s called today — is a word that means “coworking facility.” I always like brands that are synonymous with an industry.

Coworking tears a page from Uber’s ride-sharing concept and applies it to office workspaces. Instead of owning or renting an office, companies contract to use preexisting, fully furnished offices managed by an outside company. This allows individuals, small teams and large enterprises to contract for full-service office spaces on a monthly basis.

Another company I worked for previously had its office at one of The We Company’s facilities. We toured the office, agreed to terms and moved in within a week.

We had previously been in an old building that shut off the air-conditioning at 5 p.m. sharp and nickel-and-dimed us at every chance.

Company morale went up as soon as we got into our new office. It offered 24/7 access, multiple conference rooms, communal printing, phone booths for private conversations, free (and fantastic) coffee, multiple levels of common areas, events, perfect climate control and built-in networking with a community of entrepreneurs and operators.

The We Company is the Starbucks of office workspaces.

And coworking is not just for small companies. About 40% of We Company members are enterprises so large that sometimes they take an entire floor in a building.

But individuals are also flocking to coworking facilities: designers, architects, videographers, even teachers running after-school tutoring programs.

My favorite thing about working at a We Company office? There are offices in most major world cities, and the coverage is only growing.

So, I could use our downtown We Company office for a meeting when I was in the city, or duck into a We Company space when out in Denver or another city spending time with family.

This is an essential element to the future of work. Millennials and Gen Zers value their time, flexibility and experiences more than older generations.

Coworking delivers greater flexibility and a better workplace experience without the hassle of complex commercial lease negotiations.

And the growth doesn’t lie. Coworking has grown 1,000% over the last decade:

Conventional office workspaces compared to coworking spaces graph

Your Best Way to Profit From the “Future of Work” Mega Trend

The We Company isn’t a public company, so you can’t buy stock in this up-and-coming innovator.

The company has filed for an initial public offering but has yet to set a date for it. However, I expect the company will go public in the fall.

A way to play the new coworking mega trend now is to add real estate investment trusts (REITs) with coworking exposure to your portfolio.

Vornado Realty Trust (NYSE: VNO) and Boston Properties Inc. (NYSE: BXP) are two great bets.

Oh, and by the way — that company I used to work for and whose office move I coordinated? They upgraded to a We Company facility.

Until next week,

Hudson Cashdan

Editor, IPO Speculator

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