[bctt tweet=”WeWork’s recent failure to go public has left the future of the company looking grim.” username=”allwork_space”]
Investor interest dwindled after the company came under scrutiny for its $47 billion valuation, business model, financial losses and unprofessional corporate culture. So how could the rest of the industry that runs on a similar model fare during a recession?
Economists predict a recession is expected to come in the next two years, so WeWork and its competitors like Knotel and Industrious will surely be put to the test.
Some real estate experts expect coworking operators to lose customers during a recession, but that some companies will be downsizing and looking for flexible office space.
The coworking industry has only become mainstream in the past decade, so it has yet to be tested on a larger scale during an economic downturn.
According to CBRE, coworking takes up just about 2% of all commercial office real estate, so any slowdown it experiences is not expected to have a big impact on the industry as a whole.
One flexible workspace firm has survived a recession though. IWG has been around for decades and has virtually seen it all: the dot-come bubble, filing for bankruptcy and the Great Recession. Now, it is flourishing while its biggest competitor struggles to stay afloat.
“In our industry, you always need to be prepared for any major swings in the market,” said Michael Berretta, VP of Network Development at IWG. “However, the good thing about the current demand for coworking is that companies will continue to look for flexible workplace options, regardless of market swings.”
