Coworking vs. Flexible Private Office

How to Decide: Coworking or Private Office Space

Both can be luring, so getting a basic understanding is essential.

Both coworking and flexible private offices are broad offerings and can have elements of shared spaces, desks, timeshares and even private offices. The biggest difference is really the agreement. Coworking is a membership and typically month-to-month, whereas flexible office space is longer lease agreements.

Both really fit under the category of flexible space and are overall in short supply. Flexible space only represents less than 2% of the available space on the market, but coming out of COVID-19, some predict the demand could be higher than 10%. 

Going into 2020 coworking was the growing segment and a favorite for freelancers, entrepreneurs, creatives, small businesses and growing companies. However with almost 90% of the professional service market experiencing remote working of some form during COVID-19, coworking saw challenges and many landowners and employees have started to eye how to adapt coworking and flexible space options as a viable new way to work as people seek to return to the office. 

Coworking 2.0

Emerging from COVID-19, coworking will still look like an office. With desks, offices and lounges - the focus is still on community, WiFI, kitchens, conference rooms, happy hour and shared office management. The difference will mostly be a focus on sanitization and better distancing. Prior most coworking was trying to fill the space at a capacity of 2.5 people per desk with a ratio of 60% shared and 40% private (or less). Instead managed timeshares and more reasonable distance will be key, with private spaces growing.

Private offices 2.0

Traditionally private offices and small suite rentals were empty rooms, often pricey and renters had to pay for utilities and fit-out costs. Most spaces required leases of months or years. This is also changing and many small office spaces are adopting some of the coworking perks of furnishing, WiFi, smaller shared spaces and minimal managed services. They will also likely be timeshared or private. Some common spaces are also emerging. Where the percentage of private space was nearly 90%+, it looks like that space utilization will change to 75%-80%, but the opportunity to charge higher rents with additional amenities will offset some or all of the landlord investment costs. 

What makes the most sense?

Outside of privacy needs or the perception of having a space, the most common sense way to think about it is 15+/- people. With 15 people typically, depending on the market, you can get equal or a larger private space at the same costs, usually including utilities. 

In deciding, think about the future forward, your growth and needed flexibility. 

For tenants:

If early in that stage or relatively stable and under 15, some form of coworking/shared space likely makes more sense. Growing rapidly with needed flexibility and likely to grow 15+, a flexible office space is likely the way to go. 

For landlords:

It is more about what is around you. If in a business hub, with growth and small business, a coworking 2.0 space or hybrid private offering is likely better. If in an area where people are likely to be working independently remote, work in relatively stable industries or centered around housing, private offices are likely to be more in demand.