Coworking vs. Flexible Office Space: The Devil Is in the Details
Coworking and flexible space — they’re the same thing, right? To the untrained eye, the general consensus might be “pretty much,” but if you have anything to do with your company's real estate portfolio, you know how much the details matter.
It’s understandable that these very different concepts get lumped together; after all, both offer office space on flexible terms. That’s where the similarities end, however. From amenities and infrastructure to company size and term length, the differences are stark. In a nutshell, flexible office means managed space for one company and one company only, in that company’s brand and tailored to its preferences. Compare that to coworking spaces, which house individuals and smaller companies in spaces that reflect the branding and preferences of the coworking operator.
Before we get into the nitty gritty, let’s talk about the lay of the land. It’s safe to say that we are experiencing a sea change in how people find, occupy, and interact with office space. By the year 2022, the number of people in the U.S. expected to work in coworking spaces is projected to be almost 1.1 million. Further, according to JLL, by 2030, over 30% of the office space market in the U.S. is expected to be “consumed as flexible space.” This tangible movement away from traditional long-term commercial real estate leases shows no signs of abating.
Here are the key distinctions between coworking and flexible office space to be aware of.
First thing’s first — coworking spaces might fit the bill for independent contractors and small businesses, but for larger and/or growing companies that have rigorous standards when it comes to branding and operational capabilities, sharing space with other businesses just isn’t going to cut it. Flexible office space, on the other hand, can accommodate companies of all sizes, from seedling to enterprise, since the approach is about tailoring to the particular company, not appealing to the masses.
Coworking spaces can be accessed without long-term commitment, from hours to months at a time. However, the planning, partnership, and buildout that goes into a flexible office space means that a commitment of at least a year is usually required. With this model, users still enjoy all the benefits of flexibility, since terms are significantly shorter than the industry average 5–10 year leases.
The operations of coworking spaces are driven by overarching data that gives a formulaic prescription for how spaces “should” be laid out and what amenities are available for use, whereas flexible spaces provide the amenities that a company wants based on their own employees’ working behaviors, in tandem with high-touch space management. In an era when business moves at an unprecedented clip, good flexible solutions can adapt to companies’ needs on an almost real-time basis, from day 2 redesigns to adjustments to the amount of space needed.
Because flexible office spaces cater to just one client per space, setup and layout are worlds apart from the average coworking space. In terms of space per person, for example, the average WeWork is about 75 square feet. Compare that to Knotel’s average of 130 square feet per person. What’s more, with flexible space, companies can benefit from layout decisions that are based on workplace strategy, rather than on how to fit as many people in an office as possible.
A company’s culture can make all the difference in whether it ultimately succeeds or fails. Coworking means conducting your business under the neon lights of someone else’s. Conversely, flexible office space means that no matter where in a the world a company’s office is located, there can be consistency in branding and work modes, with the company’s culture reflected in every design decision.
Both coworking and flexible office spaces are typically located in the primary business areas of major cities. The major difference is that with flexible office space, companies are involved in the space search and can decide exactly where they want to be, from neighborhood to building class, and be the sole occupant of their floor(s).
Coworking operators have a necessary “one size fits all” mentality in order to provide space that fits the average office worker. Flexible spaces, on the other hand, conduct a design process that involves getting to know an organization, how its people work, and how to support its business strategy. This tailoring is becoming increasingly important to global corporations. For example, in a recent Knight Frank survey of that demographic, 75 percent of respondents stated that personal productivity linked to wellbeing and happiness at their companies would increase with a shift towards a new flexible and collaborative model of occupancy, more in keeping with today’s business structures and working styles. What’s more, companies are moving to address the different needs that different worker profiles have, rather than building out space generically across the board.
Ultimately, companies looking to scale will eventually outgrow even the most generously designed coworking space. Many companies that sampled the wares in the early days of coworking had experiences that fell short of their expectations and, understandably, aren’t interested in a do-over. Flexible space offers an entirely different proposition, however; so much so that even the major brokerage houses are getting into the fray.
The reality is that flexible office space is engineered to both motivate and accommodate company growth, and goes further to the heart of the workplace than coworking ever could. Namely, to the very infrastructure and amenities that make employees happier and companies more productive. Download The Ultimate Guide to Coworking vs. Flexible Office to learn more.