The rise in coworking spaces echoes the transformation that the traditional “Office” finds itself in.
Seems fair – you wouldn’t rent a residential property you owned to someone who couldn’t pay the rent each month, right? But coworking, as popular as it is, has never been fully stress-tested in an economic downturn, making more traditional landlords hesitant to have coworking operators in their building.
Some coworking companies come in with plans for major build-outs – adding full kitchens with beer taps, building a gym space, and in some cases re-organizing the literal walls to make more, smaller offices – which can make them a trickier tenant for the building manager.
Even with the caution of some landlords, coworking is a major growth driver within the commercial office market.
JLL’s 2019 coworking report stated the coworking sector has grown 23% on average annually since 2010, which is unlike any other sector’s growth.
Coworking space accounts for less than 5% of the total U.S. office stock, but they predict that number will skyrocket to 30% by 2030.
Fast-growing cities like Denver, Nashville, and Charlotte are among the top cities expanding the footprint of coworking spaces.