The massive boom in coworking spaces has shifted the paradigm of how traditional offices operate, so what is next for the sector?
For starters, traditional offices will begin to replicate the coworking model in order to retain employment.
“So even if major insurance, tech or real estate companies aren’t having employees work out of a shared space, they’re going to operate their office in that style,” said Warren Hersowitz, regional manager of coworking for Wun Systems.
While many companies are entering the market, demand is still outweighing supply due to tenants seeking out shorter leases and more services.
Although demand is high, it does not necessarily mean that all coworking companies will survive in this increasingly competitive market. Ryan Simonetti, co-founder and CEO of Convene, estimates that 5 to 10% of coworking firms will eventually have to sell to bigger operators.
As competition continues to grow, firms need to offer more than just a short-term workspace. Now, companies must take the hospitality route by offering amenities not seen in a traditional setting. Each firm needs a solid foundation that separates them from the rest, whether it be design, technology or community.
“I see this industry leaning more towards the hotel option where you have partners that run the workspace, providing the amenities and services needed in order to advance your building’s appeal,” said Simonetti.
The coworking space sector still has a bright future ahead of it. In fact, the total number of coworking spaces in the U.S. is expected to increase by about 9% annually through 2020, according to Small Business Labs and Emergent Research.
