Do Coworking Spaces Still Have a Bright Future Post-Pandemic?

By Jemima McEvoy Saturday, October 3, 2020

Coworking spaces have become increasingly popular throughout the past few years. Fitting many niches, these easy-to-rent, sharable office areas cater to traveling professionals, work-from-homers, and anyone else in need of a functional work environment on demand. However, COVID-19 has shocked the coworking space industry — resulting in new obstacles and opportunities. The coronavirus pandemic could have potential long-term impacts on coworking spaces and their prominence in the professional world.

The Pre-Pandemic Boom

The concept of a coworking space, a location where professionals can come together and complete tasks either individually or collaboratively, has been around for over a decade. In fact, the first official coworking space was launched in 2005 by a programmer in San Francisco frustrated by the lack of productivity in “home offices.” With a few desks, free Wi-Fi, and shared lunches, a coworking space was born, serving as the model for similar ventures going forward. In the past few years, demand for coworking locations has soared, resulting in temporary offices popping up across the world. In 2018, 2,100 coworking spaces opened up globally, 1,000 of them in the U.S., according to Inc. Magazine. By 2022, it’s expected that there will be 25,968 coworking spaces worldwide. 

There are multiple reasons why people have been flocking to coworking spaces. Near the top of the list is the growth of the gig economy, a labor market dominated by short-term or freelance work instead of permanent jobs. As more people began working gigs instead of jobs—many of which are remote—the desire for flexible office space for client meetings, a professional environment, and the presence of co-workers grew. Before the pandemic, more than 3.9 million Americans worked from home at least half the time (that number has increased massively since). Shifting startup culture is another factor in the burgeoning popularity of coworking spaces. These types of offices and their cultures have been shown to spur creativity and cultivate entrepreneurship, making them staples in the cities or towns where they are based. Finally, coworking spaces provide growth in the real estate market, which more investors are keen to take advantage of. The user experience is also incredibly high quality, often including perks like parking or professional events or cafés, which you can access through subscriptions, day passes, or open houses. The workplaces are affordable, productive, flexible, and pose fantastic networking opportunities.

Coworking Spaces and Coronavirus 

As it has for most industries, the coronavirus public health crisis has presented new obstacles for coworking space businesses. In the short term, coworking spaces have suffered enormously from the pandemic, predominantly because people have been confined to their homes, unable to enter public spaces until recently. The appeal of coworking has also diminished as people have warmed to the concept of remote work, while layoffs and business closures have slashed the American workforce by millions. A Wall Street Journal (WSJ) report points out that many coworking spaces were struggling to create successful business models even before the pandemic, leading many to renegotiate leases or close up offices, including market leader WeWork. According to JLL, a brokerage that conducts office research, roughly one-fifth (4,500) of the U.S.’s coworking locations will close or change operators. In many ways, the pandemic poses a near-deadly threat to what was once “one of real estate’s hottest sectors,” in the words of the WSJ. 

On the flip side, however, the pandemic could inject the market with a much-needed burst of energy in the long-term. As of June, around 40% of Americans were working from home full-time because of COVID-19 and estimates suggest up to 31% of the global workforce will work from home multiple days a week by the end of 2021. Moreover, a number of the country’s leading companies have signaled that remote work may extend beyond the pandemic, with many opting to sell their office spaces. Mark Zuckerberg said that as many as 50% of Facebook’s employees could be working remotely within the next five to 10 years. Twitter is allowing workers to do their jobs from home “forever” if they so choose, and Square said it wants employees to work in whatever environment suits them. This newfound flexibility and the shifting workforce trends could result in broadened appeal for coworking spaces and businesses may be searching for ways to support employees from afar.  People may want the feel of an office—face-to-face interaction and a change in scenery—to punctuate long stretches of work-from-home life. Many coworking spaces are optimistic this “new normal” will boost business. 

“As an alternative to committing to large amounts of space under multi-year leases at suburban corporate parks, some companies could opt to implement a re-imagined workplace ecosystem that balances office, home and third places,” concluded a new report by Cushman & Wakefield on “The Changing Role of Coworking in the Workplace Ecosystem.” “In this ecosystem, some employees [work from home] a couple of days a week and at a coworking office close to their home the other days.”

Coworking Today

Many states have begun allowing workers back into offices in phases. Along with that, a number of coworking spaces are opening their doors to members once again—with new and strict safety precautions. Different spaces have different strategies, but many have settled on a fundamental list of changes to make the locations safe for customers. 

“We closed our coworking spaces upon stay-at-home orders issued in our state, and during the closures we worked to keep members engaged with steady communication via email and social media and hosted numerous virtual events. We also allowed members to fully pause billing on their memberships,” wrote Colorado-based Proximity space. “Now that businesses in Colorado are permitted to reopen and many of our members are eager to return to their coworking spaces, we spent a lot of time researching and preparing for a safe reopening.”

Proximity, like many other spaces hoping to safely reopen, starts by checking guidance from county, city, and state officials. It’s unlikely that coworking spaces will operate at full capacity for a while. “To prioritize safety and help provide members with a higher level of comfort in returning to our coworking spaces, we decided to reopen to current members only,” wrote Proximity, who also capped occupancy at 50% of each of their spaces. 

Making and confirming a cleaning plan is a top priority for coworking spaces today, in addition to providing users with the tools to keep spaces clean while they’re being used. Shift Workplaces in Denver, for example, has invested in hospital-grade UV light disinfectant technologies that sanitize conference rooms and common areas during the night.

Companies have also needed to change office space layouts to encourage social distancing. “We rearranged our furniture to create more space between desks, in common areas and in conference rooms,” explained Proximity. “For shared tables and conference rooms, mark off seats that are unavailable so that members are discouraged from sitting too close together. To create additional separation between workspaces, also consider dividers and movable walls.”

About the Author

Headshot of Jemima McEvoy

Jemima is a journalist who enjoys reporting on business, particularly small business and entrepreneurship.

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