While the coworking industry has continued to grow at a steady and consistent pace, economic factors and the oft-referenced bell curve could possibly signify that this growth may not last. Let’s analyze whether this consistency is being challenged and whether its sustainable in the near future.
One of the primary reasons to believe in the long term sustainability of coworking is the fact that corporate coworking is still a relatively young concept. What began around 2016 is now a phenomenon in the industry, with more and more Fortune 500 companies turning to coworking spaces as a means of energizing their workforce and breaking stale traditional office environments. Not coincidentally, the biggest brand in coworking, WeWork, is leading the charge in attracting corporate clientele.
Some of the biggest American coworking markets also happen to be some of the largest national and international hubs for these enterprise corporations. New York City, the Bay Area in California, Miami, and other markets are leading the way in the corporate trend which gives no signs of slowing down. Reverting to a traditional office concept isn’t just going to become a new trend after all the progress that’s been made in the last decade or so.
If corporations continue to see success in innovation and future-proofing, why would this concept not sustain?
Coworking emerged out of the Great Recession as a viable alternative for those who simply couldn’t afford a traditional office lease. Looking back on its infancy over 10 years ago, one begins to realize that in the event of another economic downturn, the shared workspace model is positioned to withstand the hit. Whether it’s freelancers, independent workers, or corporations who need to downsize space, the working class will turn to coworking space for financial and socioeconomic reasons. Business owners will feel they can avoid long leases in a situation that may not be beneficial to them.
Per Deskmag’s annual survey, the number of coworkers, spaces, and size of spaces has continued to increase steadily every year since the survey was initiated. We’re at the point where well over 2 million people work out of coworking spaces and there’s a record number – over 22,000 – of spaces open worldwide. Although a common concern would be that operators listed ‘attracting new members’ as their leading challenge, it goes against the result that 30% of operators had plans to add space or desks within their current location. The industry is continuing to grow, or at the very worst, remain stable in every key statistical measure.
One of the biggest concepts in favor of the continued rise of coworking is that it makes networking simpler than ever. A recent Knoll study showed that 82% of coworkers experience a rise in the size of their business network. That is a huge number which shows just how powerful the industry is for employees of all fields.
In it’s own ecosystem, working in a coworking space drives independent employees to find collaboration opportunities. It leads to enterprise corporations finding new talent and tapping into new markets.
It’s incredible to picture the fact that demand is still exceeding supply when it comes to available coworking space. While projections show an increase in total spaces by 16% yearly until 2022, the number of members is expected to nearly triple in the same window, all the way up to 5.1M by 2022. Coworking sustainability could come into question if we were at a point where the market really was saturated. But in fairness, we’re nowhere near that.
In fact, it’s important to note that while these raw numbers are impressive, coworking’s total penetration into the office market is still low. Estimates show that coworking represents between 1-3% of the entire US office space inventory. There is little doubt that this number will continue to rise, representing a continuing shift from the rigidness of traditional office to the flexibility of coworking.
Overall, there are some projections that show the pace of growth for coworking cannot continue at its current rate. But this does not mean the industry’s rise isn’t sustainable. The speed and consistency of growth is at an astonishing pace the last 5-10 years. Maybe that rate dips. But there is nothing to lead us to believe that the curve will turn toward a decline in the usage of coworking. The same can be said for the amount of new spaces or even the amount of major corporations using coworking to their advantage.
To learn more about how Yardi Kube is the platform of choice for growing coworking operations, please click the link below.
Yardi Kube is a coworking management platform delivering all the tools needed to grow a smart and connected workspace. The Kube platform enables your technology to work intellligently together from managing leads and monthly billing, to accounting, and on-demand Internet and Voice services. With all the hardware, software, and essentials for building a thriving workspace, Yardi Kube helps you increase revenue, maximize productivity, and build community.