Gilad Tisona: "Shared Workspaces are the Dominant Work Environment of the Future"
Real estate developer Gilad Tisona believes that the efficiency of shared workspace offices will make most of today's offices redundant
By: Gilad Tisona
TEL AVIV, Israel - Nov. 11, 2019 - PRLog -- The Right Work Environment for High-Tech
"Let's think about a young startup entrepreneur who wants to start his venture," says Gilad Tisona. "He needs space for himself, he needs privacy, maybe access to a kitchen and a restroom, perhaps he needs to have occasional meetings, access to office equipment, and so on. In the beginning, he has no income whatsoever, and his financial abilities are limited, and therefore in most cases he can't afford to have an office of his own – certainly not in a prime location. Without a sharing economy and a shared office venture, he may never even get underway, and we as an economy may lose him. However, by renting a workstation in a shared office complex, the young entrepreneur saves himself considerable costs and receives identical services."
"In addition," says Tisona, "an integral part of shared workspaces is the social aspect: Renting an office or a workstation in a shared workspace allows entrepreneurs from a wide range of different areas to work together under the same roof and thereby meet, share ideas and experience experiences. The work environment is more pleasant, people prefer shared offices, even if some could technically work from home. These encounters in the shared spaces can be the basis for networking and exposure to different types of business opportunities. The number of customers in shared workspaces worldwide is just under 2 million, but this number has been steadily increasing every year, and at the current rate will reach 5 million by 2021.
Shared Workspaces are Investment Opportunities
There are currently more than 60,000 square meters of shared workspaces in Israel, and they are an effective and convenient solution for many people. Naturally, most shared workspaces are located in big cities, especially in the center of the country, where on the one hand office rental costs are very high, but on the other most potential renters live, who naturally prefer renting in the shared workspace complex closest to their home.
"The shared workspace model is becoming more and more dominant, at the expense of regular office buildings," says Tisona. "WeWork bought the offices in order to retain all of the profits. However, the company has apparently bitten off more than it can chew. Nevertheless, the right investor, by calculating their steps a little more moderately, ends up making an educated gamble. Office complexes are popping up all over the country, some even in the periphery. This is one of those, "How didn't they think of this before?" ideas. I believe the future will be replete with other such sharing initiatives."
A little less than ten years ago, a young Israeli "kibbutznik"
WeWork was scheduled to go public on the New York Stock Exchange in September of this year, with a valuation of $47 billion, with Japanese Softbank alone investing over $10 billion. But unfortunately for WeWork and its exciting story, when it suddenly became known that experts careful examining the company's IPO prospectus found it rife with a multitude of bizarre Zen quotes and less economic models than required.
The value of the company before the IPO was slashed to $20 billion, and then to $10 billion (less than what it had raised), and it is currently unclear whether or not the company will actually go public. It turned out that WeWork's economic model wasn't sufficiently established, and there was growing concern it was a financial bubble. Gilad Tisona: "It is unclear whether or not WeWork will survive the crisis, but the underlying economic model is certainly viable."
"Today, everything is shared"
Gilad Tisona is an Israeli real estate developer and investor who invests in office complexes in Israel and around the world. According to Gilad Tisona, investors simply did not perceive WeWork for what it is: "WeWork gave people the illusion that it had reinvented the wheel, and suddenly it turned out that it did not. People thought this was a high-tech company with an innovative twist. In fact, WeWork is a real estate company: It owns the office complexes in which it invests. WeWork's model is to purchase large spaces, give them a cool design and profit from the rent. Even though WeWork has indeed had astronomical expenses (a $2 billion loss in 2018), the fundamental idea is right."
According to Gilad Tisona, sharing as an economic model is the future: "For years, we used to think the economy could grow without limit. The tragedy of us all is that When you have unlimited access and unlimited demand for a certain resource, the fate of that resource is to be entirely depleted. The same holds true for construction space: We've overloaded our big cities with offices to the point where we have run out of attractive areas for construction. Current real estate prices are very high, and they affect certain businesses that are unable to bear the cost of rent in terms of their business models."
"That's the essence of a sharing economy," says Tisona. The concept is simple: "Let's say I need a drill to carry out repairs in my home (as a matter of fact, I actually did need one just yesterday). I need to go to the store and purchase a new drill for NIS 600, and the real waste is that I won't need it again for at least another two years. What if there was a place where I could rent a drill for two hours, for a few shekels, and then return it? It's very simple. The AutoTel project in Tel Aviv works the same way: Instead of buying a car that just sits unused most of the time, you can rent a car for a few hours and then pass it on to the next user."