The Future of Coworking: Adapting to a Changing Workplace

Coworking spaces have undergone a major transformation post-pandemic, adapting to shifting workforce trends while traditional office markets struggle to recover. While the demand for conventional office leasing remains uncertain, flexible workspaces are thriving, offering businesses adaptability in an era where long-term office commitments are less desirable.

At IPG we’ve seen firsthand how coworking is no longer just an alternative to traditional office space—it’s a key part of modern workplace strategy. Companies of all sizes are rethinking their approach to office space, prioritizing flexibility, cost efficiency, and collaboration. The ability to scale up or down without the burden of long-term leases has become a critical factor in real estate decisions.

The Evolution of Coworking Post-Pandemic

Coworking spaces have seen a steady expansion in major U.S. markets, with national inventory reaching nearly 7,700 spaces at the end of 2024, according to Coworking Café. This represents a 23% year-over-year increase, highlighting the sector’s resilience and growing demand. Unlike traditional office spaces, which are still struggling with record-high vacancies, coworking is filling a crucial gap in the evolving office market.

However, expansion today looks different than it did pre-pandemic. Companies like WeWork, once synonymous with aggressive expansion, have pivoted towards a more strategic growth model. Instead of taking on long-term leases at scale, coworking providers are favoring revenue-sharing agreements with landlords, ensuring a more sustainable business model.

This shift mirrors what’s happening in the broader office sector—occupiers want flexibility, and landlords need ways to fill space. As a result, coworking spaces are increasingly being integrated into traditional office buildings as an amenity, offering meeting rooms, event spaces, and short-term workspace solutions for tenants.

Urban vs. Suburban: Changing Location Strategies

Another notable shift in coworking strategy is the move beyond central business districts (CBDs) and into mixed-use neighborhoods and suburban markets. Before 2020, 70% of coworking spaces were in downtown locations, while 30% were in suburban or secondary markets. That ratio has flipped, with suburban coworking demand surging as more professionals prefer working closer to home.

This mirrors the demand we’ve seen at FOCUS Innovation Studio, where professionals, startups, and growing companies are prioritizing ease of access, modern amenities, and flexibility over rigid, long-term office commitments.

The Future of Coworking: What’s Next?

With office strategies still evolving, coworking is positioned to be a long-term solution for businesses navigating uncertainty. The ability to scale workspace needs, provide employee flexibility, and offer high-quality office environments without major capital investment makes coworking a valuable tool in the future of work.

As companies continue to adjust their real estate strategies, the question isn’t whether coworking will continue to grow—it’s how traditional office markets will adapt to compete. The demand for flexibility is clear, and coworking spaces will remain at the center of that transformation.