Though many landlords and property developers have entered the coworking industry, panelists during a recent CRE event pointed out that in order for coworking to be lucrative in buildings, no more than 20 to 30% of space should be allocated to it.
The opinion voiced by many is backed by a recent CBRE study, which found that once the share of coworking in a building takes up over 40% of the building’s footprint, the building shows less favorable cap rates than its peers. Still, there’s no denying the impact of coworking, and last year alone, coworking operators accounted for 10% of office absorption in the US; that number rose to 34% during the first half of this year.Â
Panelists also noted that the coworking industry will experience increased consolidation and that small coworking spaces are unlikely to survive in the long-term.Â