Despite the dramatic unraveling of WeWork’s IPO, coworking and flexible office spaces are still highly valuable to the evolving workforce.
By 2030, JLL predicts that coworking will account for a third of the U.S. office market, up from 5% today.
Additionally, CBRE found that Australia’s office precincts rose by nearly 54,000 square meters in the past six months, with about 58% of that taken up by coworking operators.
The boom in supply from coworking operators is leading to indigestion, causing some firms to offer discounts and free rental periods. With such an oversupply, why are analysts so sure that coworking is here to stay?
“A growing number of employers are unable to sign a long lease, unable to project their headcount five or 10 years hence, unable to spend millions on upfront fitout costs, unable to keep up with the latest trends of office design and operation, unable to open an office in every location in which they have employees and unable to provide the guarantees that landlords and lenders would ideally like to see,” said Dror Poleg, an advisor on technology and real estate.
Moving forward, the coworking sector will likely continue to evolve as it exits infancy and enters maturity. For example, firms will experience changes like adopting landlord partnerships, offering pay-as-you-go offices, niche workspaces, and being acquired.
Regardless of the transformation that the industry undergoes, one thing is clear — coworking services the changing workforce.