As outlined recently in Coworking: What CRE Leaders Need to Know (originally published in the March issue of LEADER Magazine), coworking is heavily susceptible to market conditions as the industry faces mounting competition, a volatile tenant base, few barriers to entry and looming lease increases.
Just in the past several months, we’ve seen coworking continue to evolve and expand into new business models and settings. Developers, for example, are starting to allocate space within their buildings to serve as community/coworking environments. These spaces are seen as a shared amenity that attracts and connects tenants, just as fitness centers once did.
We’re also seeing coworking go from being small, community hotspots to “big box” environments. As BisNow recently reported, in Chicago alone WeWork operates five coworking centers spanning 356,000 square feet. MakeOffices, another industry giant, operates three Chicago coworking centers that add up to 160,000 square feet. For some, these large environments have lost the boutique feel and sense of community that was so appealing in the first place. (Download HOK and CoreNet Global’s Coworking Research Report.)