THE FUTURE OF COWORKING SPACES

Working a traditional 9-to-5 at the same company for decades may have been the norm a generation ago, but the nature of the workplace is rapidly changing. Today’s workers — and especially millennials — want careers with flexibility, freedom, and creativity. It’s no wonder coworking spaces have exploded in popularity in recent years. As the coworking industry continues to grow across the globe, commercial real estate organizations may consider leasing to a coworking company or building out a coworking space alongside their traditional office spaces.

Is Coworking the New Norm?

More than one million people worked at 13,800 coworking spaces worldwide in 2017, according to Deskmag’s 2017 Global Coworking Survey. At coworking spaces, workers use communal space or rent a desk of their own, while sharing amenities such as free drinks, printers, or scanners with coworkers.

Deskmag estimated that 1.7 million people would be working in about 19,000 coworking spaces globally by the end of 2018. By 2022, Small Business Labs envisions a whopping 5.1 million coworking members in over 30,000 spaces.

“Employees nowadays want freedom and flexibility,” Dan Zakai, CEO of Mindspace, said in a recent Future of Everything interview. “Ten years from now, the flexibility that coworking spaces offer today might become the new norm for office leases.” Here are a few things shaping the future of coworking.

Revolutionizing What "Office Space" Includes 

Companies like the Minneapolis-based Life Time Fitness have carved out coworking spaces for customers. Restaurants have also gotten on board, with some opening their doors to coworkers during non-dining hours. For example, La Sirena in New York City’s Chelsea neighborhood welcomes workers until dinner service through Spacious, a company that helps transform unused space into productive workspaces

“Coworking and coworking spaces are going to revolutionize and disrupt the way that we know and understand traditional office spaces and environments all across the globe,” Bjorn Rosinus, Founder & CEO of Endeavor Innovative Workspaces told Future of Everything. “We will see a shift away from long-term office leases into more flexible solutions typical of coworking spaces.”

Expanding Into New Markets 

In a sign of strength and opportunity, expansion into new markets is also well underway worldwide. For example, in the US, several large coworking companies have announced plans to expand into the Midwest in recent years. WeWork, Serendipity Labs and Industrious are all forging into cities like Indianapolis, Cincinnati, Columbus and Detroit.

Expansion has been fueled by millennials’ preference for open work formats. With millennials anticipated to make up 75 percent of the workforce by 2030, according to Wired, this shift makes sense. Growth in coworking spaces has also been driven by the rapid growth of the freelance, or gig economy. Intuit estimates gig workers make up 34 percent of the workforce and will grow to 43 percent by 2020. The rise of tech-forward small-to-medium-sized businesses and startups has also helped.

Increasing Amenities in the Office 

Increasingly coworking spaces are adding even more amenities—such as juice bars, gyms, and coffee shops—and other services and conveniences to their offerings, a trend experts expect will continue.

Amenities enhance workers’ experience and give coworking spaces a leg up on a home office or coffee shop. Covo Coworking, in San Francisco and St. Louis, has worked a retail coffee shop, tap room, and café into its work space. Future additions will include a health club and spa.

An enhanced digital presence will also be a feature of coworking spaces, Benjamin Dyett with Grind in NY and Chicago tells the Huffington Post. Grind, for one, developed a new platform for its growing community to better help members communicate and collaborate with each other.

Developing Industry-Specific Spaces

As the demand for coworking spaces continues to grow, experts also anticipate an appetite for industry-specific
spaces. Traditional coworking spaces aren’t set up to handle the demands of entrepreneurs bringing products to markets in certain niches such as food, IoT technology, or agritech.

For example, Chisel calls itself the first coworking space for lawyers and law firms in the Washington DC Metro/Tysons area. In Bend, Oregon, Ruffwear is remaking its 20,000 square-foot former warehouse in part into a coworking space geared toward those working in the outdoor industry.

According to Entrepreneur, “A new generation of coworking spaces and accelerators will rise to meet the need.”

Coworking is the Future (Maybe)

Coworking is growing, but it’s not going to completely take over the workplace quite yet. One challenge is the vulnerability of its revenue model. Rebecca Brian Pan of Covo Coworking tells the Huffington Post that “having all of your revenue come from membership dues, especially when you don’t own the property — and most don’t — there is a lot of risk.”

However, with coworking-space owners constantly adding amenities, that problem may be short-lived, meaning it could be a good time for commercial real estate professionals to incorporate coworking spaces in their mix. As Bjorn Rosinus, founder & CEO of Endeavor Innovative Workspaces, says in a Future of Everything interview, “Coworking is the future and that future is only just beginning.”