MIT Center for Real Estate publishes paper on impact of coworking on real estate value

THE MIT CENTER for Real Estate published a working paper that raises questions about whether a building fully converted to coworking space is financially beneficial for the property owner.

PROVIDENCE – A working paper published in late February by the MIT Center for Real Estate raises questions about whether a building fully converted to coworking space is financially beneficial for the property owner.

The report, called “Will CoWorking Work?” is authored by William C. Wheaton, a professor emeritus with the Department of Economics at Massachusetts Institute of Technology, and Alex Krasikov, a Boston-based economist.

The report included an analysis of 30 office properties that sold from 2016 to 2018 in 14 city markets, which had some portion of space leased to a coworking firm. The report found that properties with a small share of coworking activities had little difference in sales price when the 30 coworking buildings were compared to similar traditionally leased properties.

But the prices of the buildings dropped as the properties fully converted to coworking.

- Advertisement -

“Our data suggests that at least in 2016-2018, investors were skeptical about whether [coworking] could provide as high and as reliable [an] income as traditional tenancy,” the report stated.

Mary MacDonald is a staff writer for the PBN. Contact her at macdonald@pbn.com.

No posts to display