According to JLL, one in five coworking locations could soon close or be acquired in the coming years.
While current closures have only impacted 1.5% of coworking spaces in the top 20 US markets, JLL predicts that there will be a slow closure of nearly 25 million square feet of space.
The abandonment of leases has already started to make headway. For instance, WeWork walked away from plans to move into 149 Madison Avenue, causing landlord Columbia Property Trust to get a $6.4 million payout.
Additionally, Knotel is facing multiple lawsuits from landlords who claim the firm owes over $1.6 million in unpaid rent.
Still, some analysts remain optimistic about the future of the shared workspace industry as companies opt for flexible leases in a post-pandemic society.
“Everybody’s pretty bullish on the concept of shared workspace when we come out of this,” said Shlomo Silber, Bond Collective CEO. “But getting out of this is the struggle.