This article is based on the Everything Coworking Podcast episode “How to Evaluate the ROI on Your Amenity Spaces.” Watch or listen to the full episode.
When I opened my first coworking space in Chicago in January 2012, it had 18-foot ceilings, brick-and-timber construction, and a full view of the Chicago skyline. People would stop in their tracks when they walked in the door. And in the front corner, right next to that view, where the premium offices belonged, I built a 400-square-foot fitness studio.
I was passionate about bringing wellness to work; the space was called Enerspace, and the tagline on my registered trademark was Workspace Plus Wellness. So I outfitted the studio with kettlebells, paid a trainer to run sessions a couple of times a week without passing the cost through to members, and eventually spent about $7,000 (in 2012 dollars) to add a shower that took up roughly the footprint of a private office. I told myself I would monetize all of it at some point, but I never had a real plan for how; I was building a brand, not optimizing revenue per square foot.
My fitness studio was my version of something I now see all the time in the coworking spaces I work with: the coffee bars, podcast studios, fitness rooms, kids rooms, and wellness rooms that take up physical square footage and feel like a benefit, but cost money, or at least cost the revenue the square footage could otherwise produce.
Deciding what to do with these spaces comes down to two questions: does the amenity earn direct revenue, and does its promise sell memberships? Those are really two different questions, so you have to ask both.
Amenity spaces almost always start as somebody’s passion
The sexier features in a coworking space almost always trace back to a founder’s passion. A podcast studio, a photography studio, or a fitness room usually begins with an owner who loved the coworking space they belonged to except for the one amenity it lacked, and built their own that had it. Or with an operator opening a new space who needed a differentiator and chose the studio no competitor in the market offered. In either case, the founder thinks of the room as a differentiator and a revenue driver; I don’t think anyone starting a space believes they are building a pure amenity space.
Then the space opens, and at some point the operator starts focusing on revenue per square foot and on hitting a target profit margin. Often they don’t hit their goal, so they look for opportunities and have to question the amenity spaces. Taking a room out feels like cutting away a piece of the brand’s identity rather than repurposing it for a better use. The internal conversation becomes: we said this was our differentiator and a big part of our culture, so are we really going to take it out?
That identity question is emotional and somewhat irrational, which is what makes the call hard. I lived through that conversation with my own space, where the trademark itself said wellness. How on earth was I going to cut the fitness center?
What unmonetized square footage actually costs
This episode came out of preparing to moderate a panel on key performance indicators at the GWA conference with three longtime operators, from Lucid Private Offices, Pacific Workplaces, and Premier Workspaces, all three running office-focused models.
Lucid does not officially offer a coworking option or a dedicated desk, and that is deliberate. None of the amenities this article is about show up on their floor plans, with the likely exception of a wellness room. They target profit margins above 20 percent, and they run the business on revenue per square foot, measured across the entire space.
When revenue per square foot is the goal, every square foot has to work. Offices that are too big, hallways that are too wide, an unmonetized lobby full of flex seating, an atrium, a big elevator bank: anything that takes monetizable square feet away kills that goal. Amenity spaces belong on that list, and many operators don’t question them at all.
You pay rent and CAM (common area maintenance charges) on every foot, whether it earns or not, and for some operators CAM is material, six dollars a square foot rather than one. At $30 a foot in rent and $6 in CAM, a 400-square-foot fitness studio costs $14,400 a year in occupancy cost alone.
The opportunity cost is higher still: a photography or content creator studio typically takes up the footprint of a large team office, five or six desks, which in most markets is worth $2,000 to $3,000 a month. The back-of-the-envelope math:
| The same footprint as a team office | Revenue |
|---|---|
| Six desks at $400 per seat | $2,400 per month |
| Over a year | $28,800 |
If rentals are not clearing that number, the studio is underperforming, and because that revenue would arrive with almost no added cost, nearly all of it would be margin.
You are leaving all of it on the table.
For some amenities, that cost is worth paying, and deciding which ones comes back to those two key questions: does the amenity earn direct revenue, and does the promise it makes sell memberships?
Question one: does the amenity earn direct revenue?
Some amenities pass cleanly: if your podcast studio gets booked enough that it earns more than a meeting room or a private office of the same size would, keep it. That is a no-brainer, because converting the space to an office or a meeting room would not earn you more, and if the studio also helps your lead closure rate, so much the better.
I have worked with operators who are truly tapped into their local photography community and get real utilization on their creative studios. It is possible, but it is not the norm, and the difference is that those operators can point to the dollars the studio generates.
Question two: does the promise it makes sell memberships?
Utilization alone does not settle the question, though, and renting an apartment shows why: a renter may never use the building’s pool or host a single party on its rooftop deck, but they really like the idea that those amenities exist, and that idea can convince them to sign when they otherwise would not have. They love the version of themselves that would use them.
Members might respond the same way to a shower, a locker room, or a meditation room. Most of these spaces go heavily underutilized in coworking spaces and in office buildings generally, and they still factor into the decision to sign.
I saw the same effect in my own space: one of my members was an experienced entrepreneur I admired, someone I would occasionally have lunch with, and he held multiple seats with us right as we were launching. He loved the fitness space and the programming because, even if nobody used it, it made him look good as a small employer offering wellness amenities to employees who were in the office every day.
That was real value, and it was also exactly the kind of feedback that gets inflated in an owner’s head, because you hear one glowing comment and make it far more meaningful than one comment deserves.
So instead of asserting that an amenity sells memberships, test the claim. Ask your team to be candid about how each amenity lands on tours, and give tours yourself again to watch people’s reactions as you walk them through the room. Ask what would happen if the amenity went away: are we talking about two members who would care, or many more?
The four amenity categories, and how to think about each one
Coworking space amenities tend to fall into a few recurring categories, but the economics behind them are not all the same.
1. Food and beverage
This is probably the amenity operators want most, and it is very hard to monetize, even at significant square footage. An operator named Josh started a space in Denver in a building he owned, with 60,000 square feet and a really cute cafe and coffee bar. Even at that scale the cafe couldn’t support itself full time; it was simply an amenity, and he knew it.
Nick Clark, who started The Common Desk, came to the same conclusion about coffee: it is a foot-traffic business, which is why you need the perfect location to make it work. There are exceptions, but in general a business like that needs more volume than a coworking space sees unless it sits inside a much larger campus with real foot traffic.
The same scrutiny applies to the grab-and-go cafe that operators in less walkable locations add so members can pick up lunch or a healthy snack: the 80/20 rule shows up, and 20 percent of your members use the amenity while it takes up space you could otherwise monetize. The question is whether you could keep your membership without it.
2. Fitness and wellness
My Chicago studio covers the fitness side, and across all the operators and models I have seen, the conclusion is the same: people rarely combine a workout with a workday. It is a major undertaking for women in particular, because a midday workout means dealing with hair and makeup at the office, so most women will not use the space during the workday at all.
The wellness room is the exception. I think wellness rooms are table stakes now: nursing mothers, people who feel unwell, people who need a break during the day for their mental health. Members expect a space like that to exist, and even if they never need it today, they want to know it is there when they do. Offer one, just not in your best corner with all the great light.
3. Podcast and photography studios
These feel like sure things because content creators are everywhere, and lots of members love the idea that the studio is there if they ever want it. The bookings tend not to follow, though, so unless you are truly tapped into that demand in your market, assume utilization will be low until the numbers prove otherwise.
4. Kids rooms
These come up less often, and the operators who build them tend to be passionate about work-life balance for parents, which produces spaces that are hard to monetize but take up square footage.
Melanie Marconi’s Vida Coworking in Oregon is the example I think of. Kids can come after school; the team programs around the room with after-school offerings and camps when school is out, and my guess is that it sells memberships for her because it is central to her brand. Even so, her best move might be to keep the room multipurpose so it can work as a meeting room during hours when kids are unlikely to be there.
The more multipurpose you can make any of these spaces, the more hours of the day you can use them.
Keep the benefit, shrink the footprint
Before you convert an amenity to offices, ask whether you can keep what members actually value in a smaller footprint, or make the amenity pay for itself.
My own fitness studio is the clearest example. The room got modest use in the mornings and afternoons and sat almost completely empty through the middle of the day, the prime monetizable hours. What surprised me was what became popular: a yoga teacher came in to run meditation sessions, and members of all kinds would take fifteen minutes out of their day to join one. I can still picture the young programmers from one startup who came every single time.
Those sessions needed no dedicated square footage; a meeting room or a little flex space would have held them. I could have pared back the physical space, converted 400 square feet of skyline-view real estate into offices, and still programmed wellness into the day in a way that reached more of the membership.
The Denver operator took a similar approach with his coffee bar. Rather than close it, he stopped staffing it all day and covered only the core morning and afternoon hours, which met most member demand without carrying a full day of fixed labor cost.
Some operators go further and turn the amenity itself into a product. I worked with an operator in Arizona who had a strong fitness space and sold memberships to personal trainers, who paid to train their own clients there while her members kept access to the space around the trainers’ sessions.
An operator in New Mexico does the same with a photography studio: photographers buy a studio membership that lets them book a set number of hours each month to bring in clients for sessions. Before you take a space out entirely, give yourself time to ask whether a model like that exists.
Put numbers and a deadline on every amenity
For each amenity space, work out what it earns directly, what the same footprint would earn as offices or meeting rooms, and what share of your total square footage amenities are taking up.
A 20,000-square-foot space can support a couple of small amenity rooms without much damage, because each one is a small percentage of total monetizable space. At 6,000 or 8,000 square feet, you probably cannot afford amenity space that isn’t producing unless you can show the dollars it brings in indirectly by selling more memberships or creating greater customer lifetime value.
Then give an underperforming amenity three to six months of hard marketing effort, and if utilization doesn’t move, convert the space into something that earns revenue. The hard part is being objective, even a little ruthless, about a room you love. It can help to ask somebody outside the business to look at the numbers with you.
What drives the bottom line in this business is the basics: a great lease structure, the right product mix with the right office sizes, parking, easy access, a great location, a strong team, and great service. If your space is winning against your competition, it is probably the basics doing the work, not the amenities you added to stand out.
This article is the written companion to this episode of the Everything Coworking podcast. For more detail on each amenity category, listen to the full episode.
