Industry Facts

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The way we work has changed and the places we work from have evolved. Simply stated, the way we look at and experience work has been revolutionized. Much of this is due to technology, but another part is due to the rise of knowledge-based economies and to the rising awareness of integrating life and work. This new trend has had an impact in the world of real estate, specifically as it relates to office real estate. While 30 years ago we had business centers and executive suites that very much resembled corporate headquarters, today we have coworking spaces, an evolution from the business centers of back in the day. And the birth of coworking has powered the flexible workspace like never before. Though many speculated just a few years ago that coworking was a fad and would eventually disappear, this has proven to be far from the truth. According to our research, coworking spaces today now take up approximately 27 million square feet of office space across the US; in Manhattan alone, the flexible workspace is the fastest-growing industry; research has found that coworking users will rise to 5.1 million by 2022; every month (in the US) there are over 12 million web searches for serviced offices, shared workspace, virtual offices, coworking, and/or conference center rentals; and by 2020, 50% of large companies are expected to have some form of shared office space in their portfolio.

The shared workspace industry is a booming industry, and it’s expected to continue to grow. Large amounts of investment are being poured into flexible workspace solutions, and 30+ years of successful business centers and executive suite operations prove that it’s a profitable business, that can cater to the needs of companies and individuals across a wide array of industries.

Why Start a Coworking Business

The coworking industry is experiencing significant growth and presents a unique opportunity for maximizing return on investment (ROI). Originally established to provide affordable workspace, coworking has evolved into the preferred workplace for individuals and companies worldwide. It has revolutionized the concept of work by prioritizing human-centric environments, integrating work-life balance, and promoting wellness. This shift has helped companies attract and retain top talent, driving the demand for coworking spaces.

In the United States alone, coworking occupies over 27 million square feet of office space, with projections indicating continued growth. Large companies are increasingly incorporating coworking into their real estate strategies, recognizing its ability to enhance resilience and adaptability in dynamic economies.

The demand for coworking is not limited to major cities; it extends to smaller markets as well. When effectively managed, coworking and shared workspaces can be highly profitable and scalable. Investing in a coworking business within a commercial property offers multiple avenues for generating substantial ROI. This includes market-rate rents paid by the business and profitability from the coworking operations.

Moreover, establishing a coworking business presents a lucrative opportunity for entrepreneurs seeking new ventures. While some operators lease space from landlords, those who both own the building and run the business typically experience significantly higher yields on their real estate investment compared to traditional office lease tenants, often reaching 2-3 times the return.

Embracing the coworking trend and incorporating it into commercial property investments can yield tremendous financial rewards. The combination of market-rate rents, business profitability, and increased real estate ROI make coworking an enticing proposition for investors and entrepreneurs alike.