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Coworking Startup MindShare WorkSpace Sees Growth Opportunity in Suburban Malls

Toronto-Area Firm Looking to Carve Out Footprint in Small Towns Not Served by WeWork and Others
October 4, 2018
MindShare WorkSpace CEO Robert Martellacci told a crowd at the International Council of Shopping Centers conference in Toronto about the room for growth of coworking spaces in suburban malls across Canada. Photo credit: Garry Marr, CoStar Group.

He only has 4,500 square feet locked down in the Erin Mills Town Centre, west of Toronto, but Robert Martellacci is hoping to tap into a gaping hole in the Canadian coworking sector.

The founder and chief executive of Mississauga, Ontario-based MindShare WorkSpace said about a year ago he created the first mall-located coworking space in Canada. He sees room for growth in malls in suburban areas and smaller cities across the country.

"Our space is a multipurpose facility. The core function is office where people can collaborate, but we offer yoga daily, we have training sessions on weekends," said Martellacci, who hopes to one day create a real estate investment trust and expand the platform.

Speaking at the International Council of Shopping Centers conference in Toronto this week, Martellacci said tenant demand is there, and space is available, but leading operators like WeWork are sticking to downtown cores.

Dave McLaughlin, general manager for the northeast for WeWork, told the RealTrends conference in Toronto last month that his group mostly focuses its leases in downtown cores when it comes into a market and then works its way out concentrically once successful, leaving the suburbs mainly on the sidelines.

Increasingly, shopping mall owners having been turning their retail space into office accommodations. Cadillac Fairview in March said Bank of Montreal would be moving into Sears' old head office at the Toronto Centre, which once housed retail. In April, Cadillac Fairview said it was moving TD Bank Group into 110,000 square feet at CF Champlain mall in Dieppe, New Brunswick.

Martellacci said he's seeing a variety of users come into his location, which has about 50 active users. "In April we had a plastic surgeon come in to do assessments in botox. He wants to see if it will work in a mall. We find people are using this as a test bed," he said, adding that in some cases they are using space for retail purposes.

Real estate firm Jones Lang LaSalle is predicting major growth for coworking in retail spaces. It released a study in August that forecast coworking space in retail will grow at a rate of 25 percent annually through 2023 and reach about 3.4 million square feet. Still, with an estimated 60 million square feet of coworking space in conventional office buildings across the U.S., malls would be a small fraction of the sector.

Martellacci figures he's beating everybody to the punch, looking for space in older rural malls and places like old abandoned bank branches. "Being in smaller centres will be a strategy for us," he said. "We want to create places where young people can work, live, play but in their own backyard. Maybe they don’t want to come to Toronto because of housing prices. We need innovation in rural Canada or it will die."

Garry Marr, Toronto Market Reporter  CoStar Group   
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