Essential Coworking and Flex Space Trends for 2024 – Insights From Our Latest Webinar

The coworking landscape is ever-evolving, and staying ahead of the curve is essential for operators and owners looking to differentiate and succeed.

Our recent webinar, “Essential Coworking and Flex Space Trends for 2024,” featuring insights from industry leaders Amanda Lewan, Co-founder and CEO, Bamboo Detroit, and Craig Baute, Founder, DenSwap & Creative Density, shed light on the critical trends shaping coworking spaces in 2024.

This recap distills the key insights and practical advice offered during the discussion, focusing on how operators can leverage these trends for operational success.

If you want to watch the entire webinar and discover all the valuable insights shared, you can do it on this page.

The State of the Coworking Space Sector in 2024: Challenges & Opportunities

As we navigate through 2024, the coworking space sector is poised at an interesting juncture, marked by significant growth amidst a landscape filled with both challenges and opportunities.

The industry’s revenue is projected to surge from $9.1 billion in 2023 to an impressive $24.0 billion by 2030, indicating a robust growth trajectory. However, this path is not without its obstacles.

Investment Dynamics

A pivotal element shaping the sector’s future is the evolving dynamics of investment, particularly the increasing involvement of building owners and landlords as new, critical sources of investment.

This shift reflects a broader understanding and appreciation of the coworking model’s value proposition, offering a lifeline for innovation and expansion in the industry.

WeWork’s Bankruptcy: An Isolated Case

The bankruptcy of WeWork, once a titan in the coworking space, has cast a long shadow over the sector.

However, it’s crucial to contextualize this event as an isolated incident rather than a bellwether for the industry at large.

While WeWork’s downfall serves as a cautionary tale, it also underscores the importance of sustainable growth, sound operational strategies, and the adaptability of coworking spaces in the face of adversity.

Market Consolidation: Navigating the Future

Market consolidation emerges as a significant trend, shaping the landscape of coworking spaces.

This movement towards consolidation signals a maturing industry, where regional chains and strategic partnerships become increasingly commonplace.

This consolidation phase also presents challenges and opportunities—while it may lead to increased competition and higher barriers to entry for new players, it also offers the potential for greater stability, improved services, and enhanced community experiences for members.

In summary, the coworking space sector in 2024 stands at a crossroads, facing challenges head-on while embracing the opportunities that come with growth and market evolution. By navigating these dynamics wisely, the sector can continue to thrive, providing flexible, community-focused workspaces that cater to the evolving needs of modern professionals.

Hospitality: The Heart of Coworking Spaces

Amanda emphasized the importance of hospitality in coworking spaces. Unlike traditional real estate ventures, coworking is about more than just providing a physical space; it’s about fostering a community and offering a memorable member experience.

Here are the main points that Amanda highlighted:

• Community Building: Successful operators understand the value of community. Encouraging members to participate in its creation through events and leadership roles can foster a strong sense of belonging and loyalty to your brand.
• Programming Experiences: Curating events that reflect your core values and serve your target audience can significantly enhance the coworking experience, turning your space into a hub for networking, learning, and growth.
• Embracing Local Culture: Integrating local art, culture, and recommendations into your space can enrich the member experience, making your coworking space a cornerstone of the local community.
• Wellness and Well-being: Offering wellness programs and considering members’ well-being are crucial in today’s post-pandemic world, contributing to a supportive environment where members can thrive.

For example, at Amanda’s coworking space, Bamboo, fostering a strong community is central to their mission. This is achieved through a variety of hospitality events, with a particular focus on cultural and diversity inclusion celebrations.

A notable example of their commitment to community building is their recent event dedicated to celebrating Black History.

Hospitality is a popular topic often discussed during large coworking conferences.

Understanding the Business Landscape

Craig shared some invaluable insights on the operational and strategic aspects crucial for coworking spaces. From funding to branding, understanding the business landscape is vital for success in 2024 and beyond.

Key takeaways include:

• Landlord Partnerships: In 2024, landlords are the main source of funding for coworking spaces. Presenting a compelling case to landlords about the profitability and branding potential of your coworking space is crucial for securing funding and favorable terms.
• Customer Understanding: Knowing your customer base, including their price sensitivity and preferences, is critical for designing a space and service offering that meets their needs. Once you meet the needs of your customers, you are set for success.
• Location Strategy: Strategic location selection, whether in urban or suburban areas, can significantly impact the success of your coworking space. As of 2024, we observe a pivot towards the suburban areas because it’s more convenient for people living outside of big city areas.

Practical vs. Marketable Amenities

Craig also differentiated between practical amenities, which are used regularly, and marketable amenities, which attract attention and discussion.

This distinction is crucial for operators looking to balance appeal with utility. Having one or two marketable amenities sets you apart.

Examples include:

• Marketable Amenities: Unique offerings like podcasting studios can serve as differentiators, attracting members and generating buzz. For example, Craig used to have a podcasting studio in one of his coworking spaces. The studio itself hasn’t been a big revenue driver but people talked about it a lot and even requested it on booking tours. It became a huge market differentiator.
• Practical Amenities: Regularly used amenities, such as reliable printing services, fulfill members’ day-to-day needs, contributing to their satisfaction and retention. Also, practical amenities don’t have to include expensive offerings. As Craig highlighted, offering sparking water is one of the things that sets them apart from most of their competitors.

Forward-Looking Predictions

Looking ahead, both speakers agreed on two big emerging trends:

1. The positive growth trajectory of the coworking space sector
2. The market consolidation

The emergence of regional chains (smaller markets) and strategic partnerships with landlords are trends likely to shape the industry landscape in 2024 and beyond.

Furthermore, the interest rates and the investment dynamics will be the most impactful industry-shaping factor.

Findings from the OfficeRnD Coworking Space Demand Survey

During the webinar, we also revealed the findings of our demand survey.

We asked coworking space members what were the top three factors that influenced their decision to choose the flex/coworking space they used?

Unsurprisingly, location was the top choice for the respondents. That’s why choosing the right location is crucial for success in this business.

We also asked members what services they like to use the most in a coworking space. The top answer here was hot desk followed by day pass.

Furthermore, the survey revealed that word of mouth was the primary method through which individuals first learned about the coworking space they used.

Key Takeaways for Owners and Operators

• Emphasize hospitality and community building to differentiate your coworking space.
• Understand your market and customer needs to design your space and service offerings effectively. Always ask yourself: does your floor plan reflect what your customer wants?
• Balance practical and marketable amenities to attract and retain members.
• Stay adaptive and open to partnerships to navigate the evolving coworking landscape.

By incorporating these insights into their strategies, coworking operators can position themselves for success in the dynamic real estate market of 2024.

As the coworking sector continues to grow, these insights will undoubtedly play a crucial role in shaping successful, community-focused coworking environments that thrive on member satisfaction and operational excellence.

What’s Next?

This is just a summary of the “Essential Coworking and Flex Space Trends for 2024” webinar. We highly recommend that you watch the entire webinar if you want to stay ahead of the curve in 2024 and beyond. You can do so here.