Dr. Gleb Tsipursky – The Office Whisperer
Nirit Cohen – WorkFutures
Angela Howard – Culture Expert
Drew Jones – Design & Innovation
Jonathan Price – CRE & Flex Expert
The global coworking market is projected to scale quickly over the next six years as hybrid work models become permanent and companies continue moving away from long-term office leases.Â
New industry forecasts estimate the market will expand from $15.81 billion in 2025 to $41.12 billion by 2031, representing a 17.27% compound annual growth rate, according to GlobeNewswire.Â
Coworking spaces provide fully serviced, flexible office environments used by freelancers, small businesses, and increasingly large enterprises. Analysts attribute the projected growth to structural changes in how organizations manage real estate costs, workforce distribution, and space utilization rather than short-term demand fluctuations.
Hybrid Work Changing Workspace Demand
Hybrid and remote work models remain the primary driver of coworking growth. As companies decentralize operations, demand has increased for flexible workspace closer to where employees live, reducing reliance on centralized headquarters.
In the United States, coworking inventory continued to expand in late 2024. According to CoworkingCafe, total coworking space grew by 3% in the fourth quarter, reaching nearly 137 million square feet nationwide. Growth has been concentrated in regional and suburban markets designed to support distributed teams.
Demand has also remained strong in major international business hubs. Flexible workspace demand in cities such as Dubai grew at a 13% compound annual rate in 2025, largely driven by corporate users rather than independent workers.
Enterprises Drive Market Expansion
Large companies are playing a growing role in coworking demand as they move away from long-term leases and toward flexible, short-term space commitments. This allows organizations to convert fixed real estate costs into operational expenses and adjust space usage in response to economic conditions.
CBRE’s European Office Occupier Sentiment Survey 2025 found that occupiers plan to allocate 29% of their real estate portfolios to flexible space by 2027. In response to institutional demand, major operators have expanded rapidly. IWG reported adding 899 new locations globally in 2024.
Real Estate Costs and Occupancy Remain Key Risks
Despite strong growth forecasts, the sector continues to face financial pressure from volatile commercial real estate costs and the need to maintain high occupancy rates. Many operators remain exposed to long-term lease obligations while generating revenue from short-term memberships.
These pressures are most pronounced in dense urban markets where office supply remains high. According to NAIOP, the average U.S. office vacancy rate reached 11.8% in late 2024, intensifying competition and limiting operators’ ability to raise prices despite rising operating costs.
Transition Toward Asset-Light Operating Models
To reduce financial risk, many coworking operators are moving toward asset-light management and franchise models. These arrangements replace fixed lease payments with revenue-sharing agreements between operators and property owners.
This approach has enabled faster expansion with lower balance sheet exposure. Industry reporting shows that IWG’s managed and franchised division recorded a 26% revenue increase in the first half of 2025, driven by this operating model.
Growth of Industry-Specific Coworking
Operators are also differentiating through specialized workspaces designed for specific industries, including life sciences, media production, and technical research. These spaces offer infrastructure not available in standard coworking environments and are less vulnerable to price competition.
As Allwork.Space previously reported, coworking spaces now represent a $1.43 billion global market, reflecting increasing demand for specialized facilities that support in-person collaboration.
Outlook
Forecasts indicate continued expansion for the coworking sector as flexible real estate becomes a core component of corporate workspace strategy. While cost pressures and market saturation remain risks, changes in operating models and demand from enterprise users are reshaping the sector’s long-term trajectory.
