Why You Should Consider Investing in a Co-Working Space

By Chris Porteous,
business.com writer
Jan 15, 2020
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Coworking spaces are increasingly popular. Find out why you should consider investing in one.

Countless businesses are struggling under the weight of hefty rent payments, with many startup owners and budding entrepreneurs refusing to foray into the commercial arena precisely because they worry they can't afford a place to work. Over the past few years, however, co-working spaces have become a common and effective response to these concerns, to such an extent that many business owners who never imagined sharing office space are now seriously mulling the prospect of investing in one.

Here's why you should consider investing in a co-working space, why they produce such great returns, and how co-working as an industry is likely to change as time goes on.

Co-working enables you to cut costs

By far the most important reason that co-working arrangements have taken off in the past few years is that they enable you to radically cut the costs associated with doing business, especially when it comes to rent. Rather than paying for an expensive office, you're sharing a large office with multiple other companies, startups, or freelancers who split the bill with you, thereby allowing you to rent a downtown location you may otherwise never be able to afford. It's not just rent payments, either, but also other costs that are reduced by co-working; shared internet services, kitchens, coffee makers, and furniture can all go a long way towards saving you money in the long run.

If you're renting a traditional office space, there's a good chance you're paying too much. As a matter of fact, one analysis found that startups, in particular, saw huge savings by relying on co-working arrangements, largely because the average real estate lease for a co-working setup is much more affordable than those of traditional offices. The overall effectiveness of co-working can depend on where you are, specifically, but most major metropolitan areas now have such steep rates of rent that co-working is fast becoming an attractive option wherever you roam.

It's not just the financial savings that make co-working spaces such an attractive investment option, either. There are plenty of reasons to believe that co-working is great because it bolsters the mental health and wellbeing of your average employee, too, which is particularly important for startups who need to concern themselves with overworking a stretched-thin workforce that could succumb to burnout. Some argue that the mental health benefits of co-working spaces are actually their greatest feature, though the extent to which you'll benefit from this arrangement depends upon the pre-existing healthcare and mental care options you offer your workforce.  

Outside of mentally stimulating your tired workforce, co-working spaces can also help your employees collaborate with other professionals whom they'd otherwise never come into contact with. For startups with a focus on creativity and the spontaneous conception of new, groundbreaking ideas, this is particularly important.

Co-working spaces enable your employees to thrive

The collaborative environment fostered by co-working arrangements permits your employees to thrive and grow to new heights while saving your money when it comes to rent. The Harvard Business Review recently took a deep dive into why co-working arrangements make people thrive so much, and what they found was relatively unsurprising – offering workers greater freedom and control over their lives, not to mention livelier working spaces that aren't as mundane or soul-crushing as traditional cubicles, can go a long way towards stimulating their creative faculties and helping them achieve more than ever before.

Co-working arrangements are a particularly solid investment for business owners who are trying to instill a sense of meaning in their workforce, largely because independent freelancers and corporate professionals alike noted that co-working spaces made them feel more accomplished and meaningful on a daily basis. Perhaps this is because so many other people are exposed to your hard work, giving you incentives to push yourself to new limits while rewarding you with the limelight whenever others notice your stellar results. The sense of community that's garnered by being a member of a co-working arrangement can't hurt, either, so startups that are trying to bolster team cohesion should consider investing in a shared working space to expedite the process.

Some cities are better than others when it comes to co-working, too, so certain companies may benefit more than others when it comes to moving to a shared location. Those in boisterous urban areas like New York City, London, or Hong Kong can benefit even more from the collaborative and free-spirited environments of co-working than their competitors in smaller cities, for instance, because the larger population of those cities permits a greater pool of talented workers with diverse skill sets. Co-working space in Hong Kong is blowing up right now precisely because it enables the people there to outcompete their nearby competitors through the power of collaboration and community.

Count the perks

Before picking out a co-working location to invest in, you should understand that counting the perks of membership is important. Some co-working arrangements offer much better amenities than others; free coffee may be common, for instance, but a fully-functional kitchen is a rare amenity that can radically bolster office morale. Comfortable furniture, high-speed internet, and similarly suitable conditions for a modern professional also can't be discounted, so don't shackle yourself to a co-working space that lacks basic features offered by others.

A well-designed work environment is a huge part of what makes talented employees want to work in the first place, so locating an investment opportunity that makes those who inhabit the office incredibly happy is highly recommended. You may be thinking about the savings you can garner from co-working more than anything else, but you really should be viewing it as a morale-bolstering and efficiency-boosting arrangement more than anything else. Before investing in a co-working space, don't be afraid to quiz the workers who currently call it home to solicit their opinions.

Finally, don't discount the perk of networking that most co-working spaces provide. Startups that are trying to expand their talent pools and individual investors interested in meeting savvy new professionals can benefit tremendously from co-working arrangements precisely because they put you into contact with so many diverse people from all walks of life. Two companies that manage radically different assets or function in entirely different industries may nevertheless build off of one another's expertise and share human capital whenever the need arises with the help of clever leadership.

Knowing how to properly network in a co-working space is essential, however, as it's a little more complicated than walking up to someone and introducing yourself. You and they are, after all, trying to get some work done.

Co-working will only grow larger

The final reason to invest in co-working arrangements now is that they're only set to grow in the near future. Co-working is fast becoming one of the most common office arrangements in most major cities around the world, and forward-thinking companies, in particular, are eagerly embracing this model. Those who are interested in real estate investments should thus realize that this is the way of the future, and it's worth getting in on it early before the market becomes flooded. Over time, we'll increasingly see businesses of all shapes and sizes flock to co-working arrangements, which will continuously prove themselves to be the future of work as we know it.

I'm a serial entrepreneur and owner of three internet ventures, including My SEO Sucks. A contributor to ZeroHedge, Entrepreneur.com, Forbes, Inc.com, and dozens of other media outlets, I believe in SEO as a product. I developed a proprietary technology fueling the #1 rankings of My SEO Sucks clients. In guest speaking ventures across North American, I advocate for organic search traffic as the backbone of any comprehensive digital marketing strategy.
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