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Coworking Market Size is Growing Rapidly

By Jeff Revoy
Chief Operations Officer
SpaceIQ

Commercial real estate (CRE) in the United States is valued at as much as $17 trillion. Within this massive industry there are diverse markets occupying different portions of the whole. One such segment—a rapidly expanding one—is coworking. Coworking market size has ballooned in recent years, firmly establishing itself as part of the traditional office-based CRE metric. But even though it’s categorized under the broad term “office space,” coworking stands apart.

CRE investors, landlords, and businesses all recognize coworking as a growing segment of the broader industry. It’s changing the landscape of traditional office stock, forcing building owners to think more about coworking as a long-term practice. The data speaks for itself. Check out a breakdown of the coworking market, its growth, and its projections for the future.

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Current coworking market size

In 2019, coworking became a burgeoning industry. Coworking market size is hard to nail down because it grows with every passing month. It also depends on how you estimate the value of the coworking market itself. Is it the value of property and memberships? Or is it measured in gross revenue?

Coworking companies estimate the total addressable market size at $1.6 trillion. This includes the value of commercial leases. It paints a picture of the enormity of the coworking market, but doesn’t necessarily capture the true value—unless a company owns the building outright, it’s a leveraged capital asset. A fairer valuation of the coworking market is the value of its collective revenue. This number currently hovers around $26 billion.

Expected coworking market growth

While the current size of the coworking industry is impressive, what’s even more amazing is its projected growth. Coworking market growth from 2013-2018 measured an astounding 29%. This fast-paced expansion is set to continue with few abatements as commercial leaseholds transition to an “access over ownership” model.

Coworking’s growth is evident in a variety of metrics. These metrics include number of locations, seats, and memberships, as well as the amount of total office stock attributable to flexible workspaces. The figures are eye-opening:

  • The number of coworking facilities will reach 36,000 by 2025, from 18,000 in 2019.
  • By 2030, the flexible workspace market will represent 30% of U.S. office stock.
  • More than 5.1 million people will have a coworking membership by 2022.

These numbers show a clear, upward trajectory across the board for coworking. More spaces, more members, and more of a role in CRE. Looking outside the U.S., the numbers become even more prolific. For example, England sees a new coworking space open, on average, every five days. China and India are also primed to contribute to global coworking, emerging as the largest markets for flexible space by as early as 2022.

Trends driving market growth

There are several major coworking trends driving the market’s rapid mainstream ascent. First among them is the shift to remote work. More than ever, full-time employees maintain part-time remote work schedules from home or coffee shops. While they appreciate the freedom and autonomy, these workers still prefer some of the trappings of a traditional office. They choose coworking for the business-casual atmosphere and the social opportunities.

Coworking statistics also suggest that rising CRE costs play a role in the prominence of the space-as-a-service business model. Companies have begun unloading burdensome leases. In turn, coworking companies have picked up the cost. They burden the lease by generating wider cash flow from patrons, while companies pay a fraction of the cost to ensure their employees get the space they need. It’s a partnership that makes sense, and the massive disruption coworking has caused proves it.

There’s also globalization to consider. As more companies do business abroad, traveling becomes a necessity. Travelers need a place to work on-the-go and companies need to be lightweight to accommodate this broad service. Coworking is the solution. As the global economy intertwines itself further and the world becomes closer, coworking will help make work just as agile.

No longer an emerging market

Emerging markets tend to be those gathering steam, poised for a breakthrough. Coworking has had its breakthrough into the mainstream—now, it’s an established market. With strong market share, the industry has room to grow as demand for coworking space increases. Based on how far it has come already, it’s possible coworking will dominate commercial real estate for years to come.

Keep reading: Benefits of coworking software.

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10 Coworking Facts that Solidify an Industry Shift

By Noam Livnat
Chief Product & Innovation Officer
SpaceIQ

Coworking’s rapid rise to prominence has caused quite a stir in the professional world. Companies of all sizes are embracing flexible work environments and workers from all backgrounds have dabbled in coworking.

But there are still naysayers. Some still believe coworking is just a fad or that it’ll fade away with any downturn in the commercial real estate market. These folks may be skeptical, but they’re overlooking clear and prominent coworking data that say just the opposite. Here are 10 facts that show the growth, stability, and demand of coworking.

Facts about coworking

The number of coworking spaces worldwide is projected to cross 20,000, reaching 25,968 by 2022, an increase of 42% from 2019.

  • 1. This is one of the most telling facts about coworking spaces. Their continued proliferation shows no slowdown in supply or demand, with new spaces added by the month. Each new coworking space creates opportunities to support a workforce becoming mobile just as quickly.

The number of coworking members will rise to 3.8 million by 2020 and 5.1 million by 2022.

  • 2. Naysayers of coworking cite massive supply as a problem. Can this market really succeed if there’s a coworking space every few blocks? It can if there’s demand. According to current projections, demand is high and set to grow higher, justifying the supply.

Before 2011, large coworking spaces rarely exceeded 20,000 square feet. It’s no longer uncommon to see spaces with more than 100,000 square feet.

  • 3. This fact suggests the success of the business model at-scale. Coworking companies are seeing consistent patronage and cash flow—enough to encourage them to test the bounds of their success at a larger scale, with more patrons.

40% of flexible workspace demand is forecast to come from large corporate companies. By 2020, ~50% of large companies will have some form of shared office space.

  • 4. The data shows that coworking isn’t just for startups and freelancers. Companies of all sizes recognize the benefits of coworking and have begun capitalizing on them. As employees in large companies begin transitioning to remote work, these figures will only increase.

72% of coworking operators say they expect to see further industry consolidation, with 58% believing consolidation is a great opportunity.

  • 5. Most facts about coworking show growth. This one shows consolidation. The caveat? Consolidation is a form of growth because it shows industry stabilization, where established companies can confidently absorb smaller competitors.

In 2018, flexible workspaces accounted for more than two-thirds of the U.S. office market occupancy gains.

  • 6. Commercial real estate is a major indicator on macroeconomic scales. The fact that coworking has moved the needle in such a significant metric shows the power of this market. Coworking is rapidly becoming a core driver of commercial real estate.

By 2030, the flexible workspace market is expected to represent 30% of U.S. office stock—an unprecedented shift in workplace demand.

  • 7. An unprecedented shift is a great way to describe the effect of coworking has had on traditional offices. Real estate is beginning to mold itself around flexible workspaces, not the traditional concept of an office. As a result, nearly a third of the market will change in the coming decade.

Workspace rental rates are projected to fall in most major cities, including New York, London, and Hong Kong.

  • 8. Coworking is a disruptor. Not only has it disrupted the commonly-held concept of what a workplace is, it’s also taking aim at the high cost of traditional office space. As coworking space becomes more available, it also becomes more affordable, making it more accessible.

Full-time workers who are not self-employed hold more than 50% of flexible workspace memberships in Europe.

  • 9. Europe is a proving ground for many ideas that eventually land stateside. Coworking has incubated overseas for years, and results like this statistic show how popular it has become. Companies and their employees have found a workspace solution that’s ideal for both parties.

71% of flexible workspace users report feeling more engaged at work, with positive impacts on their work.

  • 10. People love coworking! It’s a departure from the shirt-and-tie, clock-watching, timecard-punching monotony of the traditional workplace. It’s new and invigorating, and gives people a chance to work how they want to. The results speak for themselves.

Coworking is here to stay

These facts and figures speak volumes about coworking not as a fad, but as a viable answer to the demand for flexible work environments. The workplace has changed and so have the needs of employees. Coworking recognizes the shift and offers alluring opportunities for accommodation. The concept is growing for a reason—because it’s in-demand and will continue to be for the foreseeable future.

Keep reading: Coworking trends.

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Five Coworking Trends Shaping the Industry

By Jeff Revoy
Chief Operations Officer
SpaceIQ

By relative standards, the coworking movement is young. While the popularity of coworking spaces has exploded in the past few years, the industry itself is still developing its identity. Operators are fleshing out what it means to be a successful coworking provider, and that means experimenting with business models and offerings. As a result, coworking trends tend to quickly rise and fall .

Some coworking trends have stuck. Still more are on the upswing. Here’s a look at five of the larger movements defining the coworking industry today and what they mean for the future as the industry congeals.

1. A home for startups

The coworking model naturally lends itself to small startups. Low-cost, on-demand space is perfect for companies that need to keep overhead low (read more on the economic benefits of coworking), yet maintain close-knit operations as the business grows. In many ways, coworking spaces have supplanted traditional business incubators.

At first, startups flocked to coworking companies. Now, the trend has reversed. Coworking spaces are pitching their benefits to startups and incentivizing small businesses to use their facilities as a base of operations. Many now offer on-site consulting services and resources for up-and-coming companies. As startup culture in the United States continues to thrive, so should coworking. The relationship is mutually beneficial.

2. An artistic experience

How do you make work feel less like work and more like a social experience? That’s been the driving question behind many in the coworking industry. Coworking spaces need to combine the feel of a professional environment, with the no-pressure atmosphere of working from home or at a local coffee shop. The solution as of late has been to immerse the space in art. A theme, focus on expression, or emphasis on art bridges the gap between the uniformity of the business world and the eccentricities of individualism.

Today’s popular coworking spaces emphasize a unique, artistic experience. There’s art on the walls, eclectic accents throughout, and the feel of uniqueness all around. It doesn’t need to be an eye-popping design or over-the-top concept—just something to remind frequent patrons they’re not in the workplace of old.

3. Diversity and variety

There a few coworking conglomerates making a name for themselves in this industry—including the likes of WeWork, Knotel, and Impact Hub. But there are numerous smaller players at the local level catering to diverse niches. It’s these small players that have reached the point of opening second or third locations, or chaining into other nearby cities. While they may never reach the scale of WeWork or the like, they serve an important role: variety.

In the same way people prefer their local coffee house to Starbucks or Dunkin, independent coworking spaces have developed ardent followings. They may offer a more experiential theme or a career-specific type of space. Or, they might partner with other local businesses to give back to the community. Regardless of their niche, these spaces have crept into cities big and small and thrived because of their nonconformity.

4. Add-on services

The future of coworking will include a more diverse range of services. Already, many coworking providers have expanded their offerings. Space-as-a-service remains the foundation of the business, but there are other revenue streams built atop it. Examples of this include in-house business coaching, on-site restaurants and coffee bars, and even IT services. In many cases, they operate as standalone businesses to non-members and add-on perks for members.

Coworking spaces are also hedging themselves against the ebb and flow of patronage by executing strategies to bring in new types of customers. A coffee bar attracts customers and makes money even if they don’t occupy a desk. Similarly, someone spending the day working in-house may buy a few coffees, increasing total revenue per customer. That’s the blueprint for just about every add-on service, be it an on-site coffee bar, coaching, or computer repair service.

5. Focus on community

One of the new trends in coworking spaces is community outreach. The goal? To associate the coworking space with the local business community. It’s an effort to get local businesses to purchase memberships for employees and to attract freelancers and mobile workers away from coffee shops and other spaces.

Community orientation takes many forms. It might be a professional mixer or the venue for a local nonprofit board meeting. Affiliation with the local business community may even be as simple as hosting an open house or a “free day” for working professionals. A person may not need the workspace, but instead comes to the facility to attend an entrepreneur seminar. The coworking space collects a fee to host the speaker, with the bonus of potentially acquiring new members. The community concept is picking up a lot of steam.

Coworking continues to change

There are many other emerging trends beyond these five; however, few have had the impact or possess the potential of these promising developments. As coworking continues its rise to prominence as both a business model and an evolution of the workplace, these trends will lend it staying power.

Keep reading: Coworking pros and cons.

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Coworking Pros and Cons

By Nai Kanell
Director of Marketing
SpaceIQ

By now, most professionals are familiar with the concept of coworking. They’ve either spent time in a coworking space or know someone who has. So, are coworking spaces viewed as positive or negative? What are coworking pros and cons?

Distinguishing pros and cons gets people acclimated to coworking, so they know what to expect and what not to expect. Establishing these expectations helps mold a better experience. Business operators also need to know coworking pros and cons. These opportunities and drawbacks shape the business model and are instrumental in running a coworking space properly.

So, what are the top coworking pros and cons? What do they mean for owners and occupants? Most importantly, how can operators overcome the negatives and accentuate the positives?

Pros: The benefits of coworking spaces

Flexibility is the single biggest benefit coworking spaces offer, and they exemplify it in diverse ways. Many of the biggest benefits of coworking spaces stem from adaptability on the part of patrons and owners.

Far and away the most prominent benefit of coworking is space on demand. The space-as-a-service model benefits both sides of the transaction. Professionals rent space where and when they need it, and pay for only what they need. The same goes for businesses footing the bill for their remote employees. For coworking space owners, there’s an ebb and flow in occupancy, enabling more member sign ups and greater cash flow, like a gym.

Coworking spaces aren’t confined to static layouts. This allows them to adapt to the needs of the moment. Operators can push desks together or open rooms to groups, or space people further apart during slower periods to give them more privacy. The space truly meets the needs of the people using it.

There’s also the creative element to consider. Coworking inspires collaboration, which leads to productivity and success. It naturally fosters a sense of community and inclusion within a social environment. Professionals from different backgrounds can easily meet and chat. Vendor and customer have a neutral place to discuss business. It’s a major benefit with rippling positives.

An oft-overlooked benefit of coworking is the low maintenance of it all. Everything about these spaces is dynamic, leaving fewer opportunities for mess and disarray. No one’s desk can become a pigsty because they’re not there long enough. Basic janitorial is enough to keep facilities welcoming, and good rules about desk etiquette goes a long way toward reducing clutter.

The many benefits of coworking are apparent for today’s remote and mobile workforce. Coworking fills a void left by the phase-out of traditional offices and the demand for a flexible, workplace-like environment.

Cons: The problems with coworking spaces

Almost all problems with coworking spaces stem from the concept and lack of planning to accommodate it. Coworking isn’t a free-for-all on open space or a concept that allows people to drift aimlessly and bother others. Done right, it’s a workplace philosophy that brings people together in a structured, sensible way.

The biggest complaint about coworking is “too many distractions.” Often, it’s valid due to lack of design foresight. You can’t put 50 people in a space meant to accommodate 30, with phones buzzing, people chatting, and computers chiming. It’s a recipe for distraction. Mitigating this issue is as simple as providing the right amount of personal space and instituting etiquette rules. Even creative interior design elements can reduce distraction levels. It’s all about setting a tranquil, focused mood.

Another big concern is the lack of organization. Letting people check in upfront and wander aimlessly searching for a desk is a problem. It’s distracting and disruptive, especially if workers are bothered with questions. Structured coworking is the solution: assigned desks with flexible occupancy terms. People know exactly where to go and stay within the realm of their space, keeping the greater coworking environment organized.

Lack of space diversity can also be a problem, albeit a more location-specific problem. A coworking facility might have an abundance of single-occupancy workspaces, but none for teams of four or five. Or, there might only be one or two spaces by a window. Coworking spaces need diversity, because they cater to diverse patronage.

Coworking problems usually creep up when the space is poorly-managed. The biggest issues—lack of privacy, overcrowding, organizational questions—can all be overcome with forethought and good space management.

Weigh the pros and cons of coworking

Like any workplace desking concept, coworking has its pros and cons. It’s crucial to understand them before implementing this concept. In some cases, the negatives are nominal; in others, they require strategy to overcome. No matter the situation, it’s important to stress the positives. Getting the concept to run smoothly comes down to understanding it. Knowing the potential and the pitfalls of coworking is the secret to making it work.

Keep reading: Coworking space benefits.

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How to Become a Facility Manager

By Tamara Sheehan
Director of Business Management
SpaceIQ

Until present day, facility management wasn’t really a distinguished career path. Large corporations and multinational conglomerates used facility managers, but it was more of a specialized need than a staple position. Today, it’s different. Facility management is projected to be a nearly $60B industry by 2023. Companies of all sizes understand the benefits that come from well-managed facilities. As a result, candidates for the positions are in high demand.

To meet estimates, the number of qualified facility managers needs to grow at an exponential rate. And it’s already happening. Facility manager hirings are booming, leading up-and-coming workplace professionals into the field. The problem is getting on the facility management career track isn’t always a clear path. Here’s what you need to know:

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Institutional education

The path to facility management certification starts with a bachelor’s degree. A general degree in business will often do, however, more companies are looking for more specialized areas of study in the next generation of facility managers. Business administration is a smart choice, as is information systems management, and operations management.

Ideally, it’s best to pursue a business degree that emphasizes macro concepts and broad business ideals. Don’t worry if you leave school feeling like you don’t know too much about facilities management. The goal of institutional education is to provide you with the acumen to identify and address workplace operational needs.

Note: Some colleges and universities are offering facility management degrees. As of writing, these degrees aren’t widespread and not yet recognized by industry governing bodies like IFMA.

Continuing education

Continuing education for facility managers builds on the business concepts learned in school, with a specific focus on facilities. Industry organizations and accrediting bodies like the International Facilities Management Association (IFMA) and other organizations offer continuing education and accreditation specific to facilities management.

IFMA has more than 50 training modules for aspiring facility managers. Depending on the certification you pursue, you’ll take many of them. Pass and you’re well on your way to walking away with a facility management certificate to go with your bachelor’s degree in business.

Certification and training

Facility management training comes down to each individual’s area of focus. There are several certifications that emphasize different aspects of facility management—from a general issues, sustainability, and analytics. Almost all major FM certifications come from IFMA, including the five most popular:

Most industry professionals opt for CFM or FMP certification, since they’re the most applicable when pursuing a facility management career. Some industries demand SFP designation based on company goals. MRICS and AssocRICS are extensions of CFM and FMP certification.

Read: Eight facilities manager interview questions.

Industry trends and insights

Beyond institutional education and certification through an accredited body, it’s also good for budding professionals to develop a robust understanding of the industry they’re getting into. This can be as simple as following relevant blogs and newsletters. It’s also smart to join industry groups to get a feel for the dialog used by future colleagues and peers. Attending one or two events on the conference circuit isn’t a bad idea either—namely major events like IFMA World Workplace and the annual CoreNet Global Summit.

Remember that facilities management is in a renaissance and will continue evolving as workplace technologies develop. Staying abreast of industry trends and insights is smart for any aspiring facility manager and the duty of any established professional.

Recognize opportunities to apply your skills

Outside of following the right education and career tracks, it’s important to develop professional skills befitting a facility manager. Problem solving and the ability to examine macro and micro trends top the list. Analytical skills and organization aren’t far behind. It’s also important to have good communication skills—facility managers are often trailblazers for workplace change and improvement, which means communicating benefits to different groups (C-suite, managers, employees, etc.).

Cultivating these skills alongside proper education and training sets the stage for innovative facility management. Facility managers able to affect positive change in their workplaces will enjoy long-tenured careers doing what they love: solving problems.

Keep reading: What does a facility management salary look like?

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