• Events
  • Marketplace
  • Resources
  • Press Releases
  • Business Directory
  • Advertise
  • About Us
  • Contact
  • Submit to Allwork.Space
Thursday, February 9, 2023
Allwork.Space
The FUTURE OF WORK® since 2003
Find A Flexible Office Here
  • All Topics
    • Business
    • Biophilic Design
    • Career Growth
    • Coliving
    • Collaboration
    • Coworking
    • CRE
    • DE&I
    • Digital Nomads
    • Future of Work
    • Home Office
    • Human Resources (HR)
    • Hybrid Work
    • Investment
    • Leadership
    • Marketing
    • Mental Health
    • Mergers & Acquisitions
    • Office Furniture
    • Productivity
    • PropTech
    • Remote Work
    • Self-care
    • SMBs
    • Social Impact
    • Space-as-a-Service
    • Technology
    • Virtual Office
    • Work-life Balance
    • Workforce
    • Workplace Design
    • Workplace Wellness
  • News
  • Business
    Flexible Work and Investment in ESG are Driving Profitability for this Global Brand

    Flexible Work and Investment in ESG are Driving Profitability for this Global Brand

    Disney’s Imagination Has Failed

    Disney’s Imagination Has Failed

    Can COVID Booster Shots Save Your Business?

    Can COVID Booster Shots Save Your Business? 

    Three Culture-Building Steps To Create A World-Class Company

    Three Culture-Building Steps To Create A World-Class Company

    How To Manage Partnership Risks In The Future Of Work

    How To Manage Partnership Risks In The Future Of Work

    What It Takes To Be A Hybrid LeaderWhat It Takes To Be A Hybrid Leader

    Dr. Gleb Tsipursky CEO Of Disaster Avoidance Experts | What It Takes To Be A Hybrid Leader

    HR Leaders Share How New Salary Transparency Laws Have Changed Everything

    HR Leaders Share How New Salary Transparency Laws Have Changed Everything

    Don’t Be Adidas: Making Better Decisions Fast Is Important For Business Leadership

    Don’t Be Adidas: Making Better Decisions Fast Is Important For Business Leadership

    Are Productivity Paranoia and Lack of Trust the Real Obstacles to Hybrid and Remote Work?

    Are Productivity Paranoia And Lack Of Trust The Real Obstacles To Hybrid And Remote Work?

  • Tech
    Should You Put Your Job On AI-Pilot Mode?

    Should You Put Your Job On AI-Pilot Mode?

    3 Steps To Build A Three-Dimensional Hybrid Workplace

    3 Steps To Build A Three-Dimensional Hybrid Workplace

    PETER MISCOVICH

    Peter Miscovich JLL Global Future Of Work Leader | The Hybrid Workplace Evolution: Unlocking The Future Of Work

    AI Is Transforming The Future Of Industrial Work

    AI Is Transforming The Future Of Industrial Work

    Reimagining Offices for Hybrid Work

    Reimagining Offices for Hybrid Work: Frameable.com CEO on the Future of Virtual Offices

    How AI Can Help The Humans Within Human Resources

    HR Professionals Are Burned Out. Can A.I. Help?

    FOWP Adam Riggs

    Adam Riggs CEO Of Frameable | Can a Virtual Experience Really Replace the Office?

    Five Ways Tech Will Change The Ways We Work In 2023

    2023 Future Of Work Forecast: Five Ways Tech Will Change The Ways We Work In 2023

    Six Steps To Start A Coworking Center In The Metaverse

    Six Steps To Start A Coworking Center In The Metaverse

  • Marketing
    Instagram GenZ

    2023 Instagram Trends Reveal How To Market To Gen Z

    2023 Future Of Work Forecast: Focus Marketing On Values and Customer Experience, Not The Product

    2023 Future Of Work Forecast: Focus Marketing On Values and Customer Experience, Not The Product

    Want Your Coworking Newsletter to Actually Convert

    Want Your Coworking Newsletter to Actually Convert? Start by Keeping It Simple, Fun, and Consistent

    5 Pros Share How To Use Instagram To Grow Your Coworking Business

    5 Pros Share How To Use Instagram To Grow Your Coworking Business

    Want To Wow Coworking Members

    Want To “Wow” Coworking Members? It All Starts With (The Right) Insights

    6 Free, High-Quality Photo Sites To Level Up Your Marketing

    6 Free, High-Quality Photo Sites To Level Up Your Marketing

    The Creator Economy Is Dramatically Changing Marketing Practices, Here’s Why

    The Creator Economy Is Dramatically Changing Marketing Practices, Here’s Why

    Everything You Need To Know About Google My Business, And How To Ace It

    Everything You Need To Know About Google My Business, And How To Ace It

    Nothing Beats In-Person Communication, But These Online Tools Come Pretty Close

    Nothing Beats In-Person Communication, But These Online Tools Come Pretty Close

  • Design
    The Secret Formula To Determine How (And How Often) Your Employees Should Work In The Office

    The Secret Formula To Determine How (And How Often) Your Employees Should Work In The Office

    Create A Neurodiverse Friendly Office In Just One Minute

    Start Creating A Neurodiverse Friendly Office In Just One Minute

    Get Employee Buy-in To Make Office Redesigns Matter

    Get Employee Buy-in To Make Office Redesigns Matter

    How To Make Your Hybrid Office Accessible To All

    How To Make Your Hybrid Office Accessible To All

    Design Of Smart Office Spaces In The Post Pandemic World

    The Future Of Work Demands Futuristic Office Tech

    Designing Leadership Spaces for Hybrid Work

    Designing Leadership Spaces for Hybrid Work

    Resources And Tips To Harness The Power Of Interior Design For Environmental Impact — And Employee Retention

    Resources And Tips To Harness The Power Of Interior Design For Environmental Impact — And Employee Retention

    Designing Human Centric Workplaces Is Key To Hybrid Program Success

    Designing Human-Centric Workplaces Is Key To Hybrid Program Success

    2023 Future Of Work Forecast: Designing Offices For Evolving Workforce Needs

    2023 Future Of Work Forecast: Office Design Is Ever-Evolving; Here Are 5 Trends For 2023

  • Work-life
    You don't need to go to a physical therapist to relieve muscle aches and pains with a massage. Lacrosse balls are viable alternatives workers can use to relieve office-related pain.

    The Secret To Fast Muscle Pain Relief

    5 Brain-Boosting Snacks To Power Your Work Day

    5 Brain-Boosting Snacks To Power Your Work Day

    City-sized Buildings Are On The Way. How Will The Line Change The Future Of Work?

    City-sized Buildings Are On The Way. How Will The Line Change The Future Of Work?

    What’s Your Job Worth In The Future Of Work?

    What’s Your Job Worth In The Future Of Work?

    3 Ways To Burn Fat At Work

    3 Ways To Burn Fat At Work

    Key

    Unlock Your Hidden Benefits

    8 Crucial Tax Filing Tips For Freelancers

    8 Crucial Tax Filing Tips For Freelancers

    Update Your Home Office For A Fresh, Focused New Year

    Update Your Home Office For A Fresh, Focused New Year

    gift ideas for digital nomads

    12 Last-Minute Gift Ideas For Digital Nomads

  • CRE
    Rapid Work Style Shifts Are Tanking Tax Revenues — Can City Planners Catch Up?

    Rapid Work Style Shifts Are Tanking Tax Revenues — Can City Planners Catch Up?

    San Francisco Skyline

    The Future of Commercial Real Estate in San Francisco Doesn’t Look Good

    3 Things CRE Players Must Do To Stay Relevant In 2023

    2023 Future Of Work Forecast: 3 Things CRE Players Must Do To Stay Relevant In 2023

    The Office Space Sector Is Projected To See A Strong Fourth Quarter In 2022

    The Office Space Sector Is Projected To See A Strong Fourth Quarter In 2022

    Meet Flex Space More Chaotic Cousin Gray Spaces

    Meet Flex Space’s More Chaotic Cousin: Gray Spaces

    The Future Of Our Offices And Our Planet Hinges On The Real Estate Industry Priorities

    The Future Of Our Offices — And Our Planet — Hinges On The Real Estate Industry’s Priorities

    JLL New Future Of Work Survey The Next Few Years Are Crucial For Commercial Real Estate (2)

    JLL’s New Future Of Work Survey: The Next Few Years Are Crucial For Commercial Real Estate

    What Is The Impact Of Hybrid Working On Space Optimization

    What Is The Impact Of Hybrid Working On Space Optimization?

    What Can We Expect For The Future Of Office Occupancy?

    What Can We Expect For The Future Of Office Occupancy?

  • Coworking
    Revive Your Coworking Space With A Wellness Program

    Revive Your Coworking Space With A Wellness Program

    How To Apply For Digital Nomad Visas In 4 Idyllic Work Destinations

    How To Apply For Digital Nomad Visas In 4 Idyllic Work Destinations

    I'm an Independent Coworking Center Operator Thriving in a City with 9 WeWorks

    I’m An Independent Coworking Center Operator Thriving In A City With 9 WeWorks

    Data Tracking Software Gives Coworking Operators Competitive Advantage

    Data Tracking Software Gives Coworking Operators Competitive Advantage

    The Story Behind WeWork’s Failed Locations

    The Story Behind WeWork’s Failed Locations

    What Is An “Open” Coworking Space? 

    What is an “Open” Coworking Space?

    The Pandemic’s Lasting Impact on the Future of Coworking

    The Pandemic’s Lasting Impact on the Future of Coworking

    What Does “Community” Mean In Coworking?

    What Does “Community” Mean In Coworking? Your Answer Matters

    Is WeWork Going Bust?

    Is WeWork Going Bust?

  • Workforce
    How To Create Office Environments That Fuel Both Introverts and Extroverts

    How To Create Office Environments That Fuel Both Introverts and Extroverts

    Rethinking Retirement Plans — Is Phased Retirement The Future?

    Rethinking Retirement Plans — Is Phased Retirement The Future?

    Is Marc Benioff of Salesforce Right That You Can't Integrate Junior Staff Remotely?

    Is Marc Benioff of Salesforce Right That You Can’t Integrate Junior Staff Remotely?

    4 Monumental Ways Banning Noncompete Clauses Will Transform The Future Of Work

    4 Monumental Ways Banning Noncompete Clauses Will Transform The Future Of Work

    What To Do If You’ve Been Quietly Promoted

    What To Do If You’ve Been Quietly Promoted

    Nurture Skills To Retain Employees

    Nurture Skills To Retain Employees

    The Four Horsemen of the Mandated Return to Office

    The Four Horsemen of the Mandated Return to Office

    Indeed & Glassdoor Economists Predict Continued Hiring Challenges

    Indeed & Glassdoor Economists Predict Continued Hiring Challenges

    Will Remote Work Be A Mandated Right In The Future Of Work?

    Will Remote Work Be A Mandated Right In The Future Of Work?

  • Podcast
  • Subscribe
  • All Topics
    • Business
    • Biophilic Design
    • Career Growth
    • Coliving
    • Collaboration
    • Coworking
    • CRE
    • DE&I
    • Digital Nomads
    • Future of Work
    • Home Office
    • Human Resources (HR)
    • Hybrid Work
    • Investment
    • Leadership
    • Marketing
    • Mental Health
    • Mergers & Acquisitions
    • Office Furniture
    • Productivity
    • PropTech
    • Remote Work
    • Self-care
    • SMBs
    • Social Impact
    • Space-as-a-Service
    • Technology
    • Virtual Office
    • Work-life Balance
    • Workforce
    • Workplace Design
    • Workplace Wellness
  • News
  • Business
    Flexible Work and Investment in ESG are Driving Profitability for this Global Brand

    Flexible Work and Investment in ESG are Driving Profitability for this Global Brand

    Disney’s Imagination Has Failed

    Disney’s Imagination Has Failed

    Can COVID Booster Shots Save Your Business?

    Can COVID Booster Shots Save Your Business? 

    Three Culture-Building Steps To Create A World-Class Company

    Three Culture-Building Steps To Create A World-Class Company

    How To Manage Partnership Risks In The Future Of Work

    How To Manage Partnership Risks In The Future Of Work

    What It Takes To Be A Hybrid LeaderWhat It Takes To Be A Hybrid Leader

    Dr. Gleb Tsipursky CEO Of Disaster Avoidance Experts | What It Takes To Be A Hybrid Leader

    HR Leaders Share How New Salary Transparency Laws Have Changed Everything

    HR Leaders Share How New Salary Transparency Laws Have Changed Everything

    Don’t Be Adidas: Making Better Decisions Fast Is Important For Business Leadership

    Don’t Be Adidas: Making Better Decisions Fast Is Important For Business Leadership

    Are Productivity Paranoia and Lack of Trust the Real Obstacles to Hybrid and Remote Work?

    Are Productivity Paranoia And Lack Of Trust The Real Obstacles To Hybrid And Remote Work?

  • Tech
    Should You Put Your Job On AI-Pilot Mode?

    Should You Put Your Job On AI-Pilot Mode?

    3 Steps To Build A Three-Dimensional Hybrid Workplace

    3 Steps To Build A Three-Dimensional Hybrid Workplace

    PETER MISCOVICH

    Peter Miscovich JLL Global Future Of Work Leader | The Hybrid Workplace Evolution: Unlocking The Future Of Work

    AI Is Transforming The Future Of Industrial Work

    AI Is Transforming The Future Of Industrial Work

    Reimagining Offices for Hybrid Work

    Reimagining Offices for Hybrid Work: Frameable.com CEO on the Future of Virtual Offices

    How AI Can Help The Humans Within Human Resources

    HR Professionals Are Burned Out. Can A.I. Help?

    FOWP Adam Riggs

    Adam Riggs CEO Of Frameable | Can a Virtual Experience Really Replace the Office?

    Five Ways Tech Will Change The Ways We Work In 2023

    2023 Future Of Work Forecast: Five Ways Tech Will Change The Ways We Work In 2023

    Six Steps To Start A Coworking Center In The Metaverse

    Six Steps To Start A Coworking Center In The Metaverse

  • Marketing
    Instagram GenZ

    2023 Instagram Trends Reveal How To Market To Gen Z

    2023 Future Of Work Forecast: Focus Marketing On Values and Customer Experience, Not The Product

    2023 Future Of Work Forecast: Focus Marketing On Values and Customer Experience, Not The Product

    Want Your Coworking Newsletter to Actually Convert

    Want Your Coworking Newsletter to Actually Convert? Start by Keeping It Simple, Fun, and Consistent

    5 Pros Share How To Use Instagram To Grow Your Coworking Business

    5 Pros Share How To Use Instagram To Grow Your Coworking Business

    Want To Wow Coworking Members

    Want To “Wow” Coworking Members? It All Starts With (The Right) Insights

    6 Free, High-Quality Photo Sites To Level Up Your Marketing

    6 Free, High-Quality Photo Sites To Level Up Your Marketing

    The Creator Economy Is Dramatically Changing Marketing Practices, Here’s Why

    The Creator Economy Is Dramatically Changing Marketing Practices, Here’s Why

    Everything You Need To Know About Google My Business, And How To Ace It

    Everything You Need To Know About Google My Business, And How To Ace It

    Nothing Beats In-Person Communication, But These Online Tools Come Pretty Close

    Nothing Beats In-Person Communication, But These Online Tools Come Pretty Close

  • Design
    The Secret Formula To Determine How (And How Often) Your Employees Should Work In The Office

    The Secret Formula To Determine How (And How Often) Your Employees Should Work In The Office

    Create A Neurodiverse Friendly Office In Just One Minute

    Start Creating A Neurodiverse Friendly Office In Just One Minute

    Get Employee Buy-in To Make Office Redesigns Matter

    Get Employee Buy-in To Make Office Redesigns Matter

    How To Make Your Hybrid Office Accessible To All

    How To Make Your Hybrid Office Accessible To All

    Design Of Smart Office Spaces In The Post Pandemic World

    The Future Of Work Demands Futuristic Office Tech

    Designing Leadership Spaces for Hybrid Work

    Designing Leadership Spaces for Hybrid Work

    Resources And Tips To Harness The Power Of Interior Design For Environmental Impact — And Employee Retention

    Resources And Tips To Harness The Power Of Interior Design For Environmental Impact — And Employee Retention

    Designing Human Centric Workplaces Is Key To Hybrid Program Success

    Designing Human-Centric Workplaces Is Key To Hybrid Program Success

    2023 Future Of Work Forecast: Designing Offices For Evolving Workforce Needs

    2023 Future Of Work Forecast: Office Design Is Ever-Evolving; Here Are 5 Trends For 2023

  • Work-life
    You don't need to go to a physical therapist to relieve muscle aches and pains with a massage. Lacrosse balls are viable alternatives workers can use to relieve office-related pain.

    The Secret To Fast Muscle Pain Relief

    5 Brain-Boosting Snacks To Power Your Work Day

    5 Brain-Boosting Snacks To Power Your Work Day

    City-sized Buildings Are On The Way. How Will The Line Change The Future Of Work?

    City-sized Buildings Are On The Way. How Will The Line Change The Future Of Work?

    What’s Your Job Worth In The Future Of Work?

    What’s Your Job Worth In The Future Of Work?

    3 Ways To Burn Fat At Work

    3 Ways To Burn Fat At Work

    Key

    Unlock Your Hidden Benefits

    8 Crucial Tax Filing Tips For Freelancers

    8 Crucial Tax Filing Tips For Freelancers

    Update Your Home Office For A Fresh, Focused New Year

    Update Your Home Office For A Fresh, Focused New Year

    gift ideas for digital nomads

    12 Last-Minute Gift Ideas For Digital Nomads

  • CRE
    Rapid Work Style Shifts Are Tanking Tax Revenues — Can City Planners Catch Up?

    Rapid Work Style Shifts Are Tanking Tax Revenues — Can City Planners Catch Up?

    San Francisco Skyline

    The Future of Commercial Real Estate in San Francisco Doesn’t Look Good

    3 Things CRE Players Must Do To Stay Relevant In 2023

    2023 Future Of Work Forecast: 3 Things CRE Players Must Do To Stay Relevant In 2023

    The Office Space Sector Is Projected To See A Strong Fourth Quarter In 2022

    The Office Space Sector Is Projected To See A Strong Fourth Quarter In 2022

    Meet Flex Space More Chaotic Cousin Gray Spaces

    Meet Flex Space’s More Chaotic Cousin: Gray Spaces

    The Future Of Our Offices And Our Planet Hinges On The Real Estate Industry Priorities

    The Future Of Our Offices — And Our Planet — Hinges On The Real Estate Industry’s Priorities

    JLL New Future Of Work Survey The Next Few Years Are Crucial For Commercial Real Estate (2)

    JLL’s New Future Of Work Survey: The Next Few Years Are Crucial For Commercial Real Estate

    What Is The Impact Of Hybrid Working On Space Optimization

    What Is The Impact Of Hybrid Working On Space Optimization?

    What Can We Expect For The Future Of Office Occupancy?

    What Can We Expect For The Future Of Office Occupancy?

  • Coworking
    Revive Your Coworking Space With A Wellness Program

    Revive Your Coworking Space With A Wellness Program

    How To Apply For Digital Nomad Visas In 4 Idyllic Work Destinations

    How To Apply For Digital Nomad Visas In 4 Idyllic Work Destinations

    I'm an Independent Coworking Center Operator Thriving in a City with 9 WeWorks

    I’m An Independent Coworking Center Operator Thriving In A City With 9 WeWorks

    Data Tracking Software Gives Coworking Operators Competitive Advantage

    Data Tracking Software Gives Coworking Operators Competitive Advantage

    The Story Behind WeWork’s Failed Locations

    The Story Behind WeWork’s Failed Locations

    What Is An “Open” Coworking Space? 

    What is an “Open” Coworking Space?

    The Pandemic’s Lasting Impact on the Future of Coworking

    The Pandemic’s Lasting Impact on the Future of Coworking

    What Does “Community” Mean In Coworking?

    What Does “Community” Mean In Coworking? Your Answer Matters

    Is WeWork Going Bust?

    Is WeWork Going Bust?

  • Workforce
    How To Create Office Environments That Fuel Both Introverts and Extroverts

    How To Create Office Environments That Fuel Both Introverts and Extroverts

    Rethinking Retirement Plans — Is Phased Retirement The Future?

    Rethinking Retirement Plans — Is Phased Retirement The Future?

    Is Marc Benioff of Salesforce Right That You Can't Integrate Junior Staff Remotely?

    Is Marc Benioff of Salesforce Right That You Can’t Integrate Junior Staff Remotely?

    4 Monumental Ways Banning Noncompete Clauses Will Transform The Future Of Work

    4 Monumental Ways Banning Noncompete Clauses Will Transform The Future Of Work

    What To Do If You’ve Been Quietly Promoted

    What To Do If You’ve Been Quietly Promoted

    Nurture Skills To Retain Employees

    Nurture Skills To Retain Employees

    The Four Horsemen of the Mandated Return to Office

    The Four Horsemen of the Mandated Return to Office

    Indeed & Glassdoor Economists Predict Continued Hiring Challenges

    Indeed & Glassdoor Economists Predict Continued Hiring Challenges

    Will Remote Work Be A Mandated Right In The Future Of Work?

    Will Remote Work Be A Mandated Right In The Future Of Work?

  • Podcast
  • Subscribe
No Result
View All Result
Allwork.Space
No Result
View All Result
  • News
  • Business
  • Tech
  • Marketing
  • Design
  • Work-life
  • CRE
  • Coworking
  • Workforce
  • Podcasts
  • Subscribe
Nexudus May Leaderboard
Home Coworking

What’s My Business Worth? | A Guide To Coworking And Flexible Workspace Valuations (Part 2)

by Jonathan Price
April 20, 2021
in Coworking
Reading Time: 7 mins read
A A
What’sMyBusinessWorth?|AGuideToCoworkingAndFlexibleWorkspaceValuations(Part)

To justify its $47 billion valuation, WeWork used the Discounted Cash Flow valuation method. 

Share on FacebookShare on TwitterShare to Network
Find a remote job with Flexjobs
  • This article takes a closer look at how to value a business using the discounted cash flow and asset-based methods.   
  • The Discounted Cash Flow method of valuation is based on the fundamental principle of finance that any asset is worth the present value of all its future cash flows. 
  • With asset based valuations, a business is judged by their ability to grow their net asset value or NAV each year.  

In part 1 of this series, we listed the four main methods of valuing businesses: 

  1. Comparable Companies 
  2. Precedent Transactions 
  3. Discounted Cash Flow and  
  4. Asset Based Valuations.  

We also looked in detail at the first two of these.  

In this article we will consider the second two in more detail and think how all four methods are used for real estate-based businesses. 

The Discounted Cash Flow method of valuation is based on the fundamental principle of finance that any asset is worth the present value of all its future cash flows. The notion of a ‘present value’ is a way to express in today’s money a payment that you are not going to receive until sometime in the future.  

Imagine, for example, that a rich uncle had promised to give you $100,000 when you reached the age of 25 and that you were now only 20. What would that promise be worth today?  

The answer is that it is worth the amount of money, which, if invested for five years would end up being worth $100,000. That sounds awfully theoretical, but in practice it is easy to buy a note or bond which will pay out $100,000 in five years’ time and the cost of such a note equals the value of $100,000 in today’s money. 

So, how do we apply DCF to a coworking business?  

It’s easy to explain in principle how we use this method, but a little more difficult in practice.  

The first task is to prepare some financial projections for the business for the next five years, drawing up a profit and loss account and balance sheet for the next five years. A moment’s reflection will tell you that this is no easy task – how do you know what business will be like in 2022, let alone 2025 or 2026?  

Some things you may be able to predict five years ahead, like loan repayments or rent payments, but most things you will not, so you will need to make lots of assumptions to fill in the gaps. Once this is done you will have to take the projected profit figure for 2026 and use that to estimate a value for the business from 2026 going forward as a lump sum. There are various ways to do this, which I will not explain now, as I don’t want to make this even more complicated. 

Once you have all the profits figures for 2021-2026 and the estimated lump sum value in 2026, you work out what all these amounts are worth in today’s money using the same logic as we did for your rich uncle’s gift, and add them all together to produce the value of the business in today’s money.  

Is this as complicated as it sounds?  

Actually no. It’s more complicated than it sounds, so you probably won’t be doing it yourself. Instead, you will likely hire a consultant or investment banker to do it for you.  

In case you are wondering, it was this method that was used to justify the $47 billion valuation for WeWork in 2019.  

You see, if you make the right assumptions, you can come up with whatever number you like. 

Professional investors are well aware of both the logic of this method and also its practical drawbacks, and will tend to use it alongside other methods to try and arrive at some kind of composite valuation.  

Now let’s take a look at the final method of the four main methods: Asset Valuation. 

Valuing a company on the basis of its assets would be a nonsense in many cases. Take Apple Inc., which gained and lost again in 2020 the title of being the world’s most valuable company. Aside from its enormous cash pile and the shares it holds in other companies, Apple is ‘asset lite’ and its $2 trillion market capitalisation is only backed by $324 billion of assets.  

Its value comes from its ability to generate profits from innovation, not from owning a huge pile of assets. Most of its products are manufactured by sub-contractors and their assets do not appear in Apple’s accounts. Even Tesla, which does own factories and inventories as a manufacturer only has assets of $52 billion to support its $635 billion Market cap. 

By contrast there are certain industries where the value of a business is directly linked to the value of its assets. Another company that was, at least momentarily, the most valuable in the world is Saudi Aramco.  

That valuation is founded on its huge oil reserves. Oil and gas companies and other natural resource companies are valued on the basis of the value of their assets. The value of a gold miner, for example, is the value of its reserves of gold less the cost of production, adjusted for risk. 

Other categories of business valued on the basis of their assets include, fairly obviously investment companies, but also real estate companies, at least those which own real estate.  

The two largest real estate developers in the United Kingdom are British Land plc and Land Securities plc, and both are these days structured as real estate investment trusts or REITs. The performance of these businesses is judged by their ability to grow their net asset value or NAV each year and this is the number that investment analysts look for when the annual results are published. 

Some operators of coworking space/serviced offices also own the buildings from which they operate and for these businesses the value of the land and buildings will form part of the valuation process. The value of the assets will provide a ‘floor’ to the valuation in that even without the coworking business, the assets have a market value. 

It is tempting to think that a profitable coworking business is worth the value of the real estate plus the value of the coworking business on top. We have a technical term in the industry to describe such a belief – it is called “having your cake and eating it too”.  

The reason why this is a fallacy is that the income that they would generate is implied in the value of the property assets. Therefore, the correct formula is more like the following: 

Value of Coworking Business = Value of Assets + Value of Business – Value of Rent of Assets. 

To complicate things further, most valuers would not consider the income from a coworking centre to be worth as much as that from a long term rent paid by a major corporation, because the coworking commitment is usually much shorter and the credit rating of the client generally lower.  

To compensate, a valuer will apply a higher cap. rate, or discount rate to the projected income from a coworking business, making future payments worth less in today’s money. 

Indeed until fairly recently the major real estate firms, such as JLL, CBRE, C&W and DTZ pretty much ignored the coworking sector which they derided as having a liquidity mismatch – borrowing long and lending short, and hence bound to fail—though I suspect it was more a question of laziness.  

The employees of those firms could not be bothered to do the relatively small ticket work of servicing coworking space, but would rather spend their time schmoozing institutions for their bigger ticket deals. 

Having considered all four main valuation methods, the next article in this series will look in more depth at valuing coworking businesses. 

Stay tuned.  

Later Ad
Tags: Coworking
Jonathan Price

Jonathan Price

Jonathan is a Chartered Fellow of the Chartered Institute for Securities & Investment and was responsible for the world’s first ever public fund for investment in coworking space. Today he acts as a specialist consultant and is a visiting professor at a leading French business school.

No Result
View All Result

How will work change in 2023?

Subscribe today to know what's changing tomorrow.

* indicates required
100% FREE. You can unsubscribe or manage your preferences at any time.
Yardi
Fiverr Ad
FOWF - MR Ad Green.gif

Listen to the experts themselves

News and Features

Business

Tech

Marketing

Design

Work-life

CRE

Coworking

Workforce

Daily Digest

Podcast

Resources

Marketplace

Events

Press Releases

FlexSpace, Coworking
and Office Space

Los Angeles

New York

Chicago

Washington, D.C.

Houston

Dallas

Miami

San Francisco

Atlanta

Philadelphia

Seattle

Austin

Company

About Us

Submit to Allwork.Space

Contact

Advertise

FlexSpace

Terms Of Use

FlexSpace FAQs

Privacy Policy

Connect with Allwork.Space

Twitter

Linkedin

Facebook

Instagram

YouTube

Apple Podcasts

Spotify

Google Podcasts

©2022 Allwork.Space  l  Exploring the FUTURE OF WORK® since 2003.

No Result
View All Result
  • Daily Digest
  • Podcasts
  • Events
  • Resources
  • Marketplace
  • Business Directory
  • Subscribe
  • Advertise
  • Find Space
  • About Us
  • Submit to Allwork.Space

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
-
00:00
00:00

Queue

Update Required Flash plugin
-
00:00
00:00