The sharing economy has now entered into the commercial real estate industry with the evolution of office co-sharing. The basic idea behind office co-sharing is that multiple businesses and/or individual professionals work in the same physical office space doing away with the need to sign annual (or longer) leases. These spaces work great for start-ups, as they allow for them to avoid spending significant capital up-front and offer flexibility in terms of being able to easily modify their space needs as time goes on.

In Nashville, in particular, co-sharing spaces are sprouting up at a rapid pace. For example, Center 615, with three separate Nashville locations, allows individual professionals, on a day-by-day rental basis, to “ditch the coffee shop and grow in a professional environment.” For small businesses, Center 615 offers “suites ranging in size from 100 to 910 square feet” each complete with fiber Internet connections and are rented on a monthly basis. Another similar Nashville example of office co-sharing, located in Belle Meade and Cool Springs, is E | SPACES, who offers “class A collaborative and private office space and meeting rooms, for Nashville’s startup companies, business executives, and corporate teams.” Lawyers need to stay abreast of the developments in the office co-sharing world, as the legal issues abound in this arena, and there are no signs of the trend slowing down.

So, what precisely are the legal issues involved? As a result of the office co-sharing phenomenon, the state of commercial real estate leases is in flux. According to Law360, “[C]o-sharing offices are a new breed of use and as such are an evolving area of commercial leasing law.” Office co-sharing operators, who rent out their space on such short-term bases, need to be sure to draft leases to cover the intricacies of short-term leases, such as responsibility for all types of expenses and liability issues. Tenants, on the other hand, should aim to limit rent increases, as the short-term nature of office co-sharing agreements tend to be ripe for rapid price escalation. Moreover, certain tenants with client confidentiality duties, such as—notably—lawyers, will need to be very careful that confidential communications remain protected in such an open office environment. In this regard, Wells Anderson, a law firm technology consultant, and Joe Hartley, a California legal malpractice lawyer, suggest (1) toning down phone conversations with clients, (2) keeping confidential written material out of the view of others and especially out of common areas,  (3) avoiding the use of shared printers, (4) never leaving your computer without password protection, and (5) using a separate file server network.

Chris Borns

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