Attention Office Landlords: Tomorrow Is Here

One Workplace San Jose The Registry real estate

By Sharon Simonson

Steelcase Inc. is once again turning to Silicon Valley to map the telltale signals of the future of workplace.

The Michigan furniture maker and workplace expert has opened a pilot shared-workspace at 660 High St. in Palo Alto under the brand name Workspring. The location is across the street from IDEO, the internationally known design firm and innovation consultant that already had ownership and business ties to Steelcase.

[contextly_sidebar id=”7a09bd4a56973933eaff339a53b95e8c”]Now, Steelcase has acquired an interest in LiquidSpace, the San Francisco startup that has created an online marketplace for on-demand workspace available by the hour and day. LiquidSpace operates in more than 250 U.S. cities and offers more than 2,000 workspaces and meeting rooms. The strategic goal is to gain insight into LiquidSpace’s “consumer-ization of real estate,” said John Malnor, Steelcase vice president of growth initiatives.

Collaborative consumption is coming to commercial real estate in a much bigger way: Think Airbnb and the hospitality industry, Uber and taxicabs, he said. Workers will select a location on any day, week or month based on the tasks at hand. Sometimes that will be a corporate worksite; other times it will not.

“These third spaces—shared workspace or publicly available workspace—they will pop up just like restaurants,” Malnor said. “You will see some that you go to for your anniversary dinner and others where it is a hole-in-the-wall, for different uses.” They will vary in quality and character as much as the Motel 6 from The Ritz-Carlton.

“If you think forward to a situation where people will be choosing where they work more and more, that implies that you will have a need and you will have to filter the space around you, whether it is corporate space or ‘liquid space,’” he said. The middleman at the nexus of that selection stands to gain key knowledge.

LiquidSpace now counts among its investors a number of venture-capital firms as well as commercial real estate services company CBRE Group Inc. and Australian office and retail-space landlord GPT Group. It was founded in 2010.

GPT New Revenue Portfolio Manager Sam Nickless said in January that GPT would use the LiquidSpace platform not only within its own nine-million-square-foot office portfolio but also within its 12 million square feet of shopping centers and mall space. GPT also expects to operate as LiquidSpace’s on-the-ground business partner in Australia, expanding the online inventory of space to other landlords and talking to potential corporate users and workers. Ultimately, the plan is to expand LiquidSpace to Asia, including Hong Kong and Singapore. GPT was part of a $6 million fundraising arm for LiquidSpace at the beginning of this year.

Steelcase and CBRE together contributed $1.3 million in funding to LiquidSpace. The news release did not break down their respective interests nor did it disclose how much of the company was sold. Steelcase’s customer base is predominantly large corporations.

Steelcase has had discussion with both CBRE and the Australian real estate investment trust, Malnor said. “We don’t have a secret plan to integrate with the other investors,” he said, “but there is a common sense of purpose and of where we and they are coming from. We have had regular conversations with GPT, and we like the opportunity to work with real estate developers to help them to add value to their properties.”

Steelcase’s offerings increasingly extend to workplace consulting based on its research surrounding worker productivity and workplace metrics. The company considers itself expert on how design affects worker creativity, output and mood and has stepped up its research spending and product development in recent years to understand and address “globalization, miniaturization of technology, mobility of workers, increased collaboration and multiple generations at work,” according to its annual report.

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Photos courtesy of One Workplace