Before 2020, co-working seemed like it was on an unstoppable rise in metropolitan areas, poised to rival traditional office space leasing and causing many companies to rethink their approach to offices.
Like so many other industries, co-working was dealt a terrible hand when COVID-19 set in, with rigorous new health protocols and capacity limits creating a slew of new challenges that co-working providers had to navigate as it became clear that COVID-19 was not a short-term issue.
Additionally, 2020 meant big changes for WeWork, a fast-growing player in the co-working space that leased millions of square feet in office space in the biggest cities in the world. A failed initial public offering early last year set in motion a series of events that led to the company pulling back on leases in many areas, including closing four locations in Denver.
WeWork’s closures have opened up new opportunities for other co-working companies to grow their businesses with less competition. At the same time, traditional real estate companies have taken notice of co-working’s potential. For example, CBRE recently announced a $200 million investment in co-working provider Industrious, providing an influx of cash at a critical moment.
This deal represents a merging of old real estate methods with new and shows that traditional real estate companies increasingly see co-working as not only a worthy competitor, but a viable tool for getting clients what they need in a newly unpredictable world. Industrious now has access to capital it needs to recover and grow after the pandemic, and CBRE has a ready-made co-working option to roll into its offerings, giving clients easy access to flexible solutions.
Resilient, nimble co-working providers have worked hard to adapt to the new standards of cleanliness, distance and a host of other considerations, and these companies will continue to make their businesses work in the “new normal,” whatever that looks like. They’ve taken steps to make sure that people can safely come back to work in their spaces while once again offering (socially distanced) camaraderie that made co-working spaces special in the first place.
In fact, the post-COVID world could open up some new opportunities as companies seek flexibility while charting a new course for their office usage. As companies gradually come back to the office, many are likely to seek shorter-term solutions while they figure out exactly what their employee counts and space needs will be in the long-term. This idea goes back to how co-working began: providing space to companies that were changing fast and needed more flexibility as they did.
In sum, while 2020 was a speedbump for co-working, the industry defined by its agility will make a place for itself in the post-COVID world.
Pre-2020, many in the commercial real estate world saw co-working as a useful solution, one of many options for a company seeking to find its best fit, and that’s exactly what co-working remains today and will into the future, and with a few lessons learned along the way.