Finding Your Perfect Coworking Space Location: 5 Key Factors To Consider

Location, location, location. You’ve probably heard this age-old quote about the massive importance of location in the real estate market, whether it’s for personal or business purposes.

But while it’s a cliche, it’s also true, especially for coworking operators. Your coworking space’s location can make or break your business, so it’s essential to find the right one early on.

In this article, we’ll help you create a framework for evaluating potential spaces for your coworking business based on five essential factors:

• Target market
• Neighborhood perks
• Nearby offices and coworking spaces
• Building and space features
• Landlord considerations 

Let’s dive in.

Finding a Dream Location for Your Coworking Space

#1 Target Market

Like most other key business decisions, choosing the right location starts with your target market.

For example:

• Fast-growing tech startups looking for a long-term office may prefer communicative, crowded urban areas which all their employees can easily reach.
• Businesses with fewer employees may decide to look for an office further away from the city center to avoid traffic and overcrowding.
• Freelancers may want to work in a cozy, suburban space where they can focus on deep work.

This is a simple point but it’s also easy to overlook, so just take the time to consider who your target customers are and where they’d like to work.

If you’re not sure, look for other coworking spaces and office buildings where they already are. This is a good hint about the areas in which your space can thrive.

Check out this article to learn how one of Australia’s growing coworking brands YoCo improved business thanks to choosing the right coworking software.

#2 Neighborhood Perks

Back in 2017, WeWork ran an extensive analysis of the restaurants, coffee shops, gyms, and other amenities in certain neighborhoods.

Their goal was to pinpoint the right locations for their coworking spaces based on the density of amenities around them. While you don’t need to hire a whole data science team and create complex reports, it’s still essential to evaluate the area around your space. 

Here are three key questions to answer at this stage:

• Are there restaurants and coffee shops nearby?
• Are there gyms, yoga studios, and other sports activities within a few minutes of your space?
• Are there grocery stores close by, so people can get their shopping done on the way back from your space?

Again, this doesn’t have to be a huge scientific undertaking on your end. A quick look at Google Maps and a few hours of walking around the area should be enough.

By the way, we just launched free video series called “Flex Academy: Coworking Bootcamp” in which we discuss all that in more detail.

#3 Nearby Offices and Coworking Spaces

Businesses in the same industry tend to cluster together. This is especially true for tech startups which are the primary customers of many coworking spaces. 

That’s why you should consider if your target customers are already working in the area you’re evaluating. If there are many office buildings or other coworking spaces clustered closely in the region, chances are it’s a good spot.

However, this doesn’t mean you must blindly follow the herd. 

Building a coworking space in an area that doesn’t have many office buildings can be a good differentiator, although it’s a riskier move. If you’re going to go that route, make sure your target customers are still within 3-5 miles, otherwise it will be very difficult to get them through the door. 

At the initial stage, plan carefully when choosing your coworking space name.

#4 Building and Space Features

Once you zero in on an area, it’s time to evaluate individual spaces — buildings, floors, groups of offices, and so on. 

If you don’t know where to start, consider getting in touch with a reputable broker or agency, as they have networks of landlords on standby.

Here are three of the most important things to evaluate when looking at each space:

• Readiness for coworking operations. Some spaces can be made ready for operations with just a few tweaks. However, these are exceptions, so your best bet is to allocate a part of your budget for preparing the space — think new furniture, painting the walls, and so on.
• Noise levels and insulation. Your space will likely have areas dedicated to concentration and deep work. That’s why, if the building doesn’t have good noise cancellation already, you’ll have to invest extra in soundproofing.
• Windows, ceilings, and light. These factors drastically affect how customers perceive your space. A building with small windows and low ceilings can feel almost claustrophobic. Conversely, tall ceilings and big windows that let in natural light are much more pleasant to work in.
• HVAC, wiring, and reception. While you can try to evaluate these factors yourself, it’s much safer to just call professionals who can assess them for you. After all, you don’t want to sign a lease, start to remodel, and have electrical or air conditioning issues pop up regularly.

Check out how much it costs to start a coworking space in 2024.

#5 Landlord Considerations

After mulling over all the technicalities around the area, buildings, and budget, it’s time to consider the human element — the landlord.

You’ll want to set up a meeting with them to get a first impression by discussing questions like:

• Are they willing to work with a management agreement instead of a traditional lease? Note: You can learn more on this topic in our article on leases vs management agreements.
• If they’re open to a management agreement, what revenue split would they agree to?
• What period do they want to sign a contract for?
• Will the rent increase at the renewal date?
• Do they allocate funds for necessary repairs or improvements to the space?
• Will they give you a rent-free (or reduced rent) phase while you’re preparing to open the space?

One or two casual meetings can give you a good sense of what to expect. However, if you have the chance, talk to a former tenant as they can give you a first-hand assessment.

Local Market Dynamics and Competition Analysis

When choosing a location for your coworking space, it’s crucial to understand the local market dynamics and competition landscape. This knowledge will not only influence your decision on where to establish your space but also how to position it to attract members.

Here are six practical steps to navigate this terrain:

• Conduct Thorough Market Research – begin by assessing the demand for coworking spaces in your target area. Look into the demographic characteristics of the local workforce, including industries present, age groups, and professional status (freelancers, startups, etc.). Surveys and local business reports can be valuable sources of information.
• Analyze the Competition – identify existing coworking spaces in the vicinity. Evaluate their offerings, pricing models, amenities, and any unique value propositions. Visiting these spaces, if possible, can provide insights into their strengths and weaknesses.
• Identify Gaps in the Market – based on your research, pinpoint what’s missing in the local coworking scene. This could be anything from niche markets that are underserved, to specific amenities not offered by competitors or innovative pricing models.
• Develop a Unique Value Proposition (UVP) – armed with your market research and competition analysis, craft a UVP that addresses the identified gaps. Whether it’s a focus on sustainability, catering to digital nomads with ultra-flexible terms, or providing unparalleled tech infrastructure, ensure your UVP resonates with your target market.
• Consider Strategic Partnerships – look for local businesses or organizations you can partner with to enhance your offering. For example, a partnership with a local gym or café could provide added value to your members and differentiate your space.
• Stay Informed and Adaptable – the coworking market is constantly evolving, especially now in 2024. Regularly update your market research and be ready to pivot your strategy to stay ahead of trends and changes in local demand.

And here are some examples to illustrate how you can better fit in a local market.

Consider a coworking space that identified a lack of facilities catering specifically to tech startups in its city. By offering state-of-the-art tech infrastructure, programming workshops, and networking events tailored to this demographic, it successfully filled a market gap, drawing in a steady stream of members.

In another case, a coworking space in a predominantly creative neighborhood differentiated itself by providing studios, darkrooms, and exhibition spaces, appealing directly to the artistic community and ensuring its unique position in the market.

By meticulously analyzing local market dynamics and competition, you can strategically position your coworking space to meet untapped needs and thrive in your chosen location.

Establish and Grow Your Space with the OfficeRnD Flex Startup Program

Starting a new coworking space can be scary. There’s so much to consider, even after finding the right location, like choosing coworking software, promoting your space, creating a business plan, and more.

That’s why we created the OfficeRnD Flex Startup program – because we believe that every aspiring coworking entrepreneur should start with the right coworking software without breaking the bank. 

By taking advantage of our program, you can get a 20% annual discount on our Flex Startup plan.

Click here to apply now.