Why Coworking Is Becoming An Essential Part Of Office Real Estate

Forbes

11-08-2025

Jason Anderson is the President of Vast Coworking Group, a leading privately owned franchisor of coworking spaces.
Not long ago, coworking was seen as a niche segment—creative, agile, but speculative. That perception has since shifted. Today, as major institutional players double down on flexible workspace, one thing has become increasingly clear: Coworking isn't a stopgap; it's a resilient and essential part of the global commercial real estate ecosystem.
According to Allied Market Research, the global coworking space market was valued at $9.2 billion in 2022 and is estimated to reach $34.5 billion by 2032, growing at a compound annual growth rate (CAGR) of 14.6%. That is exponential growth.
The hybrid work revolution, accelerated by necessity during the pandemic, has become a mainstay of corporate real estate strategy. Two recent moves underscore this: CBRE's full acquisition of Industrious for $800 million, after multiple rounds of investment, as well as Yardi's agreement to take a 60% stake in WeWork through its bankruptcy exit. (Disclosure: My company has a partnership with WeWork.)
Recent developments and data confirm what many of us in the coworking industry have known for years: The future of work is flexible, and the opportunity is massive.
Government Embracing The Model
Another indicator that coworking is here to stay is the adoption of the model by the government. While coworking is not new to the U.S. General Services Administration (GSA), the agency has been piloting a program to convert federal properties into multiagency coworking hubs, as reported by Bisnow.
Federal buy-in adds another layer of credibility and stability to coworking. Often, federal actions influence the public and private sectors. For an industry that has long been fueled by startups and midsized companies, this pivot to serve federal agencies and large enterprises offers opportunity and requires operational excellence at scale.
Franchising: A Scalable Growth Engine
While institutional investment garners headlines, franchising is another powerful force shaping the coworking industry. As president and co-founder of a privately owned franchisor of coworking space, I've seen that franchising is an effective way to scale and expand access to flexible workspaces, while retaining local expertise and community connection that made coworking successful in the first place.
Franchising allows operators to bring global systems, brand equity and enterprise partnerships into hyper-local markets—without requiring massive real estate portfolios or balance sheet exposure. For investors, it's an attractive, asset-light model with recurring revenue and strong unit-level economics.
The coworking franchise model is also well-positioned to support secondary markets, suburban cities and up-and-coming innovation hubs that larger operators may overlook. As hybrid work continues to disperse across the workforce, I've noticed demand for quality space closer to home continues to rise. Franchising meets that demand with speed and consistency.
Surge In Enterprise And Mid-Market Demand
Flexible workspace is increasingly a strategic priority for large companies. A survey from WeWork recently found that 72% of companies plan to expand their office footprint, with flexibility at the core of their decision-making as 59% are considering coworking or flexible spaces. In a world of constant change with economic uncertainty, shifting workforce expectations and real estate volatility, agility is invaluable.
For coworking operators, this demand presents significant opportunity. Enterprise clients typically bring longer terms, larger footprints and higher revenue per square foot. With the right systems and support, operators can serve this expanding demographic.
What This Means For Industry Leaders
The validation from large companies, the adoption by federal agencies, the rise of enterprise demand and the growth of franchising in this sector are all acceleration points that reinforce a future where coworking is as ubiquitous as traditional office leases once were.
For landlords, that could mean reevaluating static portfolios in favor of flexible partnerships. For corporations, it may mean freeing up capital for growth rather than locking it into a 10-year lease. For investors, it could mean a category that is no longer 'emerging' but established, with proven revenue models, growing demand and high potential for innovation.
This is only the beginning. I think the next evolution of coworking will be defined by multichannel delivery (warehouses, residential, retail), deeper integration with proptech platforms and a continued emphasis on hospitality-driven experiences. The real differentiators will likely be local insight, operational excellence and the ability to scale sustainably. Franchising could play a critical role in that journey.
Addressing The Challenges
As coworking becomes more institutionalized, one challenge industry leaders face is preserving the agility and local relevance that made the model successful in the first place. Increased investment brings operational rigor and expectations of scale, but the real value still lies in the member experience, local engagement and the ability to adapt quickly to shifting market needs. Balancing consistency with customization will be critical.
While local connection is a cornerstone and advantage of franchising, franchise owners must navigate rising build-out and labor costs, more sophisticated competition and evolving member expectations around flexibility, technology and service. The days of simply 'opening a space and letting it fill' are over. Today's franchisees need to be more proactive operators, investing in community-building, marketing and sales strategies that connect with both remote workers and enterprise clients.
I've found the best way forward is to double down on support and systems. Franchisors must provide the data, tools and enterprise partnerships that help franchisees succeed in a more complex environment.
Franchise owners should leverage their local edge while operating with the mindset of high-performance hospitality brands—agile, service-focused and growth-oriented. Those who do could thrive as coworking continues to evolve into a mainstream asset class.
The Future
We are entering an era where coworking isn't a disruptor, but a core component of how work happens. It is a tool for governments, a platform for growth-stage companies, a strategy for the Fortune 500 and a pathway to entrepreneurship for franchise owners all over the world.
Now the question is no longer if coworking is here to stay, but how far will it go.
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