Coworking spaces aren’t profitable

I gave a tour of Workantile this week to a prospective new member who shared her experience working out of The Wing’s DC branch. We got to talking about how WeWork and The Wing were valued in the billions and hundreds of millions of dollars, respectively, before crashing to nothing. Those valuations were clearly absurd, but as a coworking insider, I’ll go a step farther and say there’s not much money in operating a coworking space.

That doesn’t mean coworking spaces aren’t valuable. Workantile has grown friendships, mentorships, careers, side projects, community services and made its members significantly happier. We kick around ideas, eat together, share recommendations and hand-me-downs. A long-time member swears that Workantile saved her marriage. But those benefits accrue to members and their networks and can’t easily be monetized by the space.

And it doesn’t mean people shouldn’t create coworking spaces. On the contrary, now’s a perfect time. Office rents are down, the boom of newly-remote workers are getting lonely, and concern about COVID transmission is receding. But don’t launch a coworking space – or invest in someone else’s – thinking you’ll get rich. The numbers don’t work.

Founded in 2009, Workantile is one of the country’s oldest experiments in coworking. I joined in 2015, became a “maintainer” in 2018, and currently serve as treasurer, giving me hard data on expenses and revenues.

We run lean. Rent is our big expense. We got priced out of our ground floor offices in 2019 and moved upstairs across the street. Then there’s internet, utilities, insurance, and other fees. We have a cleaning service, but all other labor is done by members on a volunteer basis. There’s not much room to cut.

On the flip side, revenue is limited by the size of our space. We have room for a few more members at our full and affiliate levels but have a waitlist for private desks. We can – and hope to – take on a few more members, but we can’t grow much more without moving to a bigger space. Which would be risky and still keep us in this cycle, since our rent would then be higher.

This is all okay! We’re happy to function as a cooperative, run for and by our members. Our goal isn’t to scale up or take over the world. We just want to save enough money to buy replacement furniture and monitors as things break.

Many good things, like wilderness preservation, aren’t profit centers. Price tags and salaries aren’t measures of worth and most value can’t be quantified. Workantile isn’t profitable, but it’s invaluable.

I’m not a businessman. Maybe someone will prove me wrong and become wealthy with a franchise of coworking locations. But I don’t see how. Some for-profit coworking schemes have collapsed, like WeWork. Others existing on a smaller scale are backed by or associated with tech companies and might not need to turn a profit. And the tech incubator model seems to have staying power, as it taps economic development incentives or venture capital money flowing into startups and can charge higher rates.

But a coworking community made up of not only programmers but authors, salespeople, graphic designers, landscape architects, accountants, and nonprofit staff? It can change those people’s lives for the better, but it won’t make anyone rich.