Within the last decade, coworking has become a significant driver of office demand. By 2019, more than two million people were working in over 22,000 coworking spaces around the globe. This explosive growth created exciting opportunities for commercial real estate investors, corporate employers, startups, freelancers, and office workers.
Now, as the world struggles to adapt to the new normal in the wake of COVID-19, many developers, businesses, and employees are wondering what the future of coworking holds. Is it possible for a sector built around community and socialization to survive this public health crisis and a new era of social distancing?
The fact is, all commercial real estate sectors are currently facing the same challenges. The total workplace ecosystem is shifting, and coworking providers need to be ready to adapt. The experts at Cushman & Wakefield believe that coworking can remain a viable and important workplace environment, as long as developers and businesses are willing to remain creative. Below, we highlight a few predictions regarding the future of coworking.
What COVID-19 Means for the Future of Coworking
One major coworking trend prior to the pandemic was the shift towards attracting more corporate users, as these members tend to rent out more space and sign longer leases. Since the start of COVID-19, businesses have seen their employees effectively work from home. A few organizations have already made the decision to keep some or all of their employees working from home permanently, making coworking spaces highly attractive to these users.
Other businesses may take a blended approach. As local economies begin to reopen, the return to office is expected to be gradual and staggered. Businesses may start by allowing some employees to return to the office, while others continue working remotely. Coworking spaces could facilitate the needs of these remote workers by allowing them to work in a safe environment outside of the house, or even to collaborate in small numbers.
Additionally, many businesses are facing economic uncertainty. These organizations may appreciate the increased flexibility and short-term commitment offered by coworking spaces as an intermediate solution while they plan out their re-entry strategy. Some businesses may give their employees the choice to work in the location that best suits their needs; for instance, the main office for client meetings, and the coworking space for team meetings and independent work.
Although freelancers represent the member segment most likely to have canceled or paused membership during the pandemic, there is a chance they will consider returning as coworking spaces reopen. Freelancers working from small, urban apartments are likely to appreciate the return to an office outside the home. Even with social distancing guidelines in place, returning to a community setting can make a big difference to a remote employee’s mental wellbeing.
Startups and small businesses have been among the most impacted coworking users during the pandemic; some of these startups may go out of business for good, and many will struggle to regain their financial footing. For this reason, these may not be the most attractive users for coworking providers who are rebuilding their client base during and after the pandemic. It will be worthwhile to monitor these users in the months to come, to determine whether or not they will continue to make up a large segment of the coworking sector.
For more information about the trends and factors that are likely to shape the future of coworking, as well as a look at coworking predictions for 20 metro areas across the United States, download the full FREE report from Cushman & Wakefield.
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