By Jason Shepherd, co-founder of Atlas Real Estate Group
A mere decade ago, most people relied on taxis when they needed a ride. The idea of summoning a stranger to transport you to your destination sounded dangerous. With a taxi, at least you know the driver is a trained professional who won’t leave you stranded in the middle of nowhere.
Uber and Lyft changed that sentiment. These services prove the sharing and trust economy works when the public understands that it can be safe, convenient and cost-effective. Now, Turo allows people to make money renting their vehicles.
Like Uber and Lyft, Airbnb is a demonstrated sharing economy framework that also applies to real estate. Thanks to this new business model, travelers can afford to stay longer for less in the Mile High city, meaning more spending money in their pocket for a concert at Red Rocks or the artistic creations of Voodoo Donuts.
The future of real estate sharing is under development, and entrepreneurs are proving that underutilized spaces can be rented through sharing and trust. Real estate sharing brings economic development and vitality to neighborhoods and its future is very promising.
What is the sharing economy?
The sharing economy is the peer-to-peer sharing of underutilized assets that is negotiated on an online platform. These platforms provide financial safety by performing escrow services and act as a middleman between parties. They also provide physical safety by identifying and qualifying participants.
Real estate sharing is expanding in Denver
Real estate sharing has extended beyond Airbnb. People are also embracing shared workspaces and shared living arrangements. Considering the current cost of Denver real estate, sharing makes sense. For many, it may be the only way to afford to live in Denver or maintain profitability.
Now that the feasibility of real estate sharing in Denver has been established, it’s time to get creative and consider additional real estate sharing opportunities. Real estate sharing in Denver can increase economic output and the vibrancy of many neighborhoods.
An art gallery provides a sophisticated event venue
Imagine owning an art gallery located in Lodi. It’s the perfect location, but the space costs a whopping $3 million to purchase. The art gallery is open Wednesday through Sunday and closes at five o’clock. The owner(s) could rent the space in the evenings and on Mondays and Tuesdays. The atmosphere of sophistication and creativity is perfect for business or group meetings, charity events, dinners and a whole host of other functions.
As real estate sharing continues to catch on, more opportunities to utilize shared space will present themselves, which is a huge economic advantage for our city.
Dedicated office spaces or co-working spaces
In a world where businesses can become broke or worth a billion dollars overnight, it’s vital for entrepreneurs to have flexibility in their leasing terms when deciding on office space. Having the option to expand or reduce office space based on their business needs reduces liability and variability when signing a traditional long-term office lease.
Real estate sharing startup WeWork is one of the first initiators to develop the solution to this problem. WeWork is available in 96 major cities. The company owns large office spaces and sublets portions to small businesses. Several businesses may occupy the building or a suite. This maximizes space capacity while allowing businesses to have flexibility in renting office space.
Not worrying about a long-term lease allows business owners to focus on their business. A vast number of successful organizations operate solely out of WeWork offices. This creative solution is available because of the sharing economy.
Sharing and trust, an interconnected relationship
Trust has long been the foundation of businesses and economies. For instance, banking is built on trust, as is the value of our currency. Without trust, conducting business becomes cumbersome, expensive and risky.
New technologies make trust possible and quantifiable. Uber handles payments and provides a star rating system. Riders know they can trust highly rated drivers and vice versa. The same is true for Airbnb. Rating systems are effective because they allow you to see the rated reputation of a person you don’t know or a property you haven’t seen and gauge trustworthiness.
The sharing and trust economies are linked; One simply cannot exist without the other. For example, Turo must provide a platform that allows people to know they are renting their cars to someone who won’t drive recklessly or intoxicated. Without trust, Turo would fail because no one would risk their vehicles being damaged, destroyed or stolen.
The sharing and trust ecosystem has proven itself in industry after industry. As a result, technology and facilitation will continue to spark growth in this new economy, with endless possibilities.
Sharing: Easier said than done
The rapid innovations in sharing economy technology have caused some growing pains. For instance, it’s difficult for logistics to keep pace with the rapid technological developments. Tech companies can create the perfect app, but eventually, that application needs to interact with people in the physical world. For this reason, we will have to continually evolve how business is conducted and service is delivered in order to make the sharing economy practical and widely accepted.
Think back to the art gallery example. Subleasing a space for a short time is a brilliant concept. There also needs to be a centralized location to showcase the inventory of shareable spaces where eager “sharers” can find a space to host their next event.
This will expand venue options for events beyond hotels and restaurants. In the art gallery example, access to the building may require a gallery employee to let people in and protect the property from theft or vandalism. Where theft and damage aren’t an issue, a mobile lockbox or e-keys could be employed.
Logistical questions to address as the sharing economy progresses:
- How do I set up a property lease for someone after I’ve shown it to him or her?
- How do I schedule their rental?
- How do I ensure it is secured?
- How do I ensure I have liability insurance?
Once the logistics and technology are ironed out, city regulations need to be considered. Not all properties are suitable for all purposes. Real estate sharing needs to consider the local environment.
The future is shared
Companies like Airbnb have proven the power of the shared economy in real estate. Other real estate asset classes, such as commercial and retail real estate, will naturally follow. Through developments in technology, insurance and government, shared real estate can confidently become the new standard.
Despite the inevitable growing pains of a new industry, positive results are already showing in the Denver market. Particularly, venUse, an online marketplace featuring vacant or underutilized venues and creative spaces for rent, is currently in the beta phase and is anticipated to fully launch in the upcoming months.
Real estate sharing will continue to make the city more affordable and stimulate economic, social and cultural growth. As we continue to reimagine utilization in real estate, venUse is a promising solution for owners to showcase their vacant properties to increase exposure and earn revenue, and for entrepreneurs and creatives to activate and energize their businesses.
Photos from venUse, an online marketplace featuring vacant or underutilized venues and creative spaces for rent. They show the variety of spaces available from work space, meeting areas, kitchens, and more.