7 Tips For Running A Successful Urban Coworking Space In 2024

For remote workers feeling lonely at home and digital nomads struggling to find reliable WiFi in local coffee shops, coworking spaces are the answer. These shared workplaces provide opportunities for in-person connection and collaboration without the constraints of a traditional office.

As office attendance decreases in major cities, professionals are increasingly gravitating toward urban coworking spaces to stay productive without sacrificing the community feel of the office.

But while the flexible office market grows, so does the competition. So whether you’re considering opening an urban coworking space in 2024 or looking to optimize your existing location, we dive into the benefits, challenges, and strategies here.

Quick Summary

• With U.S. office vacancies hitting record highs in recent years and office attendance still nowhere near its pre-pandemic average, it can be an advantageous time to open or grow an urban coworking space.
• The challenges of running an urban coworking space in 2024 include high rent, increased competition, and difficulty building a consistent community.
• Choosing a favorable location, prioritizing user experience, and marketing your space are among the best ways you can make your urban coworking space successful.

Why Urban Coworking Spaces Are on the Rise

Coworking spaces are booming in popularity. In 2018, only around 331,000 people in the U.S. used them, but by 2022, that number had increased to a whopping 1.08 million. And while 45% of coworking spaces in 2024 are in suburban areas, over half are in urban locations.

Who Uses Urban Coworking Spaces?

When establishing your coworking space in a city, it’s essential to understand what kind of crowd you’ll be catering to. These are the most common types of people who use urban coworking offices:

• Freelancers
• Remote employees
• Hybrid employees
• Digital nomads
• Entrepreneurs
• Traveling employees
• Don’t forget dog owners

Here’s a more extensive list of the most common industries that use coworking spaces.

What Are the Advantages of Running an Urban Coworking Space in 2024?

If you know how to run an urban coworking space well, 2024 can be a great time to establish or expand one.

In an increasingly remote world, workers are looking for shared spaces to socialize and build a community. While over 30% of all workers in some urban areas (like San Francisco and Washington, D.C.) are remote, 23% of remote workers have cited loneliness from staying home to be a major challenge.

Plus, thanks to the pandemic, traditional office attendance is still low in big cities. Quarter four (Q4) of 2023 saw U.S. office vacancies hit a record high of 19.6%. Also, as of March 2024, office attendance in metro areas was only 62% of its pre-pandemic average, even on the busiest day of the week.

But just because people aren’t heading into their regular offices, doesn’t mean they don’t crave human connection and a well-run working space.

What Are the Challenges of Running a Coworking Space in the City?

While this can be a great time to run an urban coworking space, doing so can also come with a few challenges, including the following.

Higher Rent Than Suburban Areas

On average, office space is more expensive in urban areas than in suburban locations. In Q4 of 2023, the annual quoted rent in downtown offices was $53.30 per square foot on average, much higher than the $35 per square foot average in suburban areas.

When your rent is higher, it becomes even more important to maintain a high occupancy rate so you can turn a profit.

Increased Competition

There is plenty of opportunity in the urban coworking space niche — but also more competition. Amid major international brands like WeWork that people recognize and gravitate toward, it’s crucial to make your space stand out from the crowd.

Difficulty Building a Community

To keep your customers coming back to your space, you need to build a community.

When people could just work from home, a community is a major reason they’d go to a coworking space instead.

It can be difficult to build a community in urban areas where people tend to be more transient, and it’s harder to attract a consistent crowd. But if people don’t feel connected to your space, they may just work elsewhere, whether it’s from home or at a local coffee shop.

7 Tips for Running a Successful Urban Coworking Space

Now that you know the pros and cons of managing an urban coworking space, let’s look at the top ways you can make yours more successful.

Choose a Favorable Location

The location of your coworking space is hugely important, especially in an urban setting. The type of customers you’re looking to attract (such as freelancers and remote employees) will often choose a spot based on convenience.

So what makes for an ideal coworking space location?

Make sure the most commonly used methods of transportation are easily accessible from your building, whether it’s the subway, the bus, or a bike path. It’s also ideal to have a few coffee and lunch spots within walking distance.

If possible, choose a central area in the business district of your city, located near other office buildings. Not only will this help you attract more customers than if you set up shop in a quiet neighborhood, but it can give your space a more professional feel.

Here’s an informative video discussing how to make the right choice for your space location.

Understand Your Coworking Community’s Needs

Before you put your new ideas in motion, it’s important to gain an understanding of what your customers need (and want) out of their coworking spaces. Then, tailor yours to fit your specific community.

For example, if your building is in an artsy neighborhood, you may attract a lot of people in creative professions. What supplies do they need to keep them coming back? Do they look for an open environment where they can talk while they work, or do they want private rooms where they can get in the zone?

Or, if your space is close to an airport, your consistent customer base may include digital nomads and employees traveling for business. How can you make them feel at home for a few days in a foreign environment?

Considering these kinds of questions will help foster happy workers and a memorable experience.

Optimize Your Layout

As people increasingly gravitate toward coworking spaces, they’re looking for access to many of the same features that private offices provide.

Aside from just a desk and chair, they may need meeting rooms, lunch rooms, private rooms for taking calls, and areas set aside for quiet work.

Again, you’ll want to get a solid understanding of what your community needs before you establish your office layout. Then use this data to figure out how many private rooms and how much open space you’ll need. Also, determine how many people you’ll need to accommodate each day.

When done properly, you can avoid both wasted office space and overcrowding. By the way, check out these space utilization metrics that every operator must track.

Figuring out this information ahead of time can also help you avoid overspending on rent and understand where you’ll profit the most. For example, knowing that coworking operators make 61% of their revenue from renting desks, but 10% comes from meeting offices and 10% from event rooms, you can optimize your space for desk use.

Last but not least, make sure to improve your space’s accessibility.

Prioritize User Experience

The more straightforward your space is to navigate, the more likely you’ll be to entice repeat customers.

Since you’re dealing with a wide range of independent professionals, teams, and schedules, implement an easy-to-use desk and meeting room booking system. The right software can help eliminate confusion and double booking, along with other frustrating issues like passive occupancy and ghost booking.

Aside from optimizing your user experience, a coworking space management platform can provide useful insight into who your customers are and how they’re using your space.

Market Your Space

With so much competition in the coworking space market, it’s crucial to advertise your location well. The better your marketing strategy, the more customers you’ll attract, the more you’ll stand out, and the more well-known your business will become.

To help your space stand out, create a distinct brand that’s geared toward your community. A few marketing methods you can utilize include:

• Social media
• Online listings
• Digital advertising
• In-person networking with your community
• Establishing relationships with local shops
• Email marketing

Consider offering free trials to potential members.

Automate Your Billing Process

Spending too much time stuck in the weeds of administrative tasks can take away from the important ones, like marketing your space and interacting with your community. And yet, you need to get paid.

Instead of juggling a million different spreadsheets, systems, and email threads, streamline your billing and payment processes into one unified coworking management system.

Choose one that will let you generate and manage invoices, receive payments, and send reminders for overdue payments. Also, with so many different types of workers and teams using your space, it’s important to have a platform that will let you create customized billing plans based on how often and how much of your area they use.

The best billing solutions also make your tax responsibilities easier. They can integrate with whatever accounting software you use, so you don’t have to manually import data when it’s time to pay taxes.

Maximize Resource Usage

Most offices have an assortment of desks, chairs, tables, and decorations. But how you use these types of resources can mean the difference between one-time customers or people who keep coming back for more.

For example, it can be helpful to purchase adjustable desk chairs, since people of different heights may be using them on a daily basis.

Plants, flowers, and plenty of natural light can turn a workday into a more pleasant experience, especially if your customers don’t have those things at home.

Or if your customer base works largely in creative professions, you may want to scatter whiteboards around your office’s walls.

Get Your Urban Coworking Space Off the Ground with OfficeRnD Flex

Coworking spaces can thrive in urban areas, and cities offer plenty of opportunities to open and run them. But for the highest chance of success, you need the right tools at your disposal.

It’s crucial to have accurate data that gives you valuable insight into your customer base, and an effective coworking space management platform to optimize user experience.

FAQ

What’s the Difference Between Office Space and Coworking Space?

Office spaces are generally meant for just one company to regularly use. Coworking spaces are shared office spaces utilized by multiple companies and types of workers at the same time.

Why Do Coworking Spaces Fail?

Coworking spaces can fail for the following reasons:

• They’re located in an unfavorable location.
• They have low occupancy rates.
• They’re overcrowded or waste office space.
• They don’t understand their community’s needs.
• They don’t stand out from their competition.

Are Coworking Spaces Dead?

Not at all! In fact, with remote work on the rise and office attendance lower than pre-pandemic levels, the flexible office market is only continuing to flourish. The global flexible office market is expected to grow from $30.72 billion in 2022 to $96.77 billion in 2030.