Coworking Demand Is “High, Yet Sustainable” Looking Into The New Year

What can be said for the coworking industry in 2023? Well, it depends on who you ask, but general consensus appears optimistic. 

In the months following vaccine availability and a somewhat return to normalcy, many companies are accepting the inevitable: flexibility is the future. 

While this doesn’t negate the plenty of leaders who have been eager for a full-office return since April of 2020, it does show that many industries are ready to embrace a hybrid workplace. 

According to a recent report from CommercialEdge, businesses are readily adopting flexible office space in an effort to cut costs, downsize office footprints and accommodate new and emerging work styles. With economists expecting a recession next year, taking cost-cutting measures now will keep businesses afloat throughout the downturn. 

“Hybrid work adoption, talent strategy and economic pressure are the top drivers for adoption,” said Christelle Bron, Agile Practice Leader at CBRE Americas.  

Not only does the shift to workplace agility help alleviate the financial burden of renting and operating a long-term lease, but it also gives companies a chance to diversify their portfolio, says Peter Kolaczynski, senior manager at CommercialEdge.  

As a result of the uptick in demand, the industry’s biggest competitors are shifting their own models and strategies to become more resilient to uncertainty. For instance, WeWork recently teamed up with Yardi to create a platform that gives members an interactive look at an office, reserve space and more.   

No doubt, upgrades that create a more user-friendly environment — without burning through cash — will be a focus for operators in the coming years. 

“It was white hot—perhaps even overheated—in the first half of the year, but right now demand is growing at a high, yet sustainable rate as many small businesses get sick of only working from home and many large companies are exiting their large long-term leased space and looking for more appropriately sized options,” said Jamie Hodari, CEO of Industrious.