The coworking industry is going to change in the next two years. In fact, over 70% of current space owners think there is going to be a shakeup with consolidation being a driving force that will clear out the bad operators and allow the good operators to grow. In that same Instant Group survey, 58% of coworking space owners think buying an existing coworking space is a great opportunity for them to jump from a single location space to a regional chain with multiple locations throughout the city or state.
Now that the modern coworking industry is over a decade old, a move from local independent spaces to more well-capitalized or more experienced operators shouldn’t be a surprise to many people. Regional chains are expected to emerge that will compete with the growing national chains like WeWork and Industrious. These regional chains, locations of 3 or more, will be won by operators that can deliver a more tailored local experience than the national chains and can move fast.
Rapid, profitable, and sustainable growth through acquisition
If you own a coworking space that has dreams of becoming a regional or national coworking chain then acquiring an existing space can be a safe, fast, and affordable way to grow. Plus, it can bolster the existing brand by having multiple locations that members can go-between.
DenSwap has coworking businesses listed for sale across the US that are selling for less than 1 to 3x their current annual profit. If you are an experienced operator then these spaces can often generate enough profit in the first 18 months after being turned around to cover the purchasing price.
The cost savings of buying a coworking space can be huge:
- No unpredictable build-out schedule
- Furniture included, often savings of $500 to $1000 per seat
- Immediate cash flow with an existing customer base
- Trained community manager
Benefits of growing from a local to regional coworking chain:
- Members can visit multiple spaces
- More efficient use of limited marketing dollars
- Shared staff members between spaces
- Increase size to lower wholesale costs of coffee, food, and office supplies
If a current coworking space was looking to expand then they would have to build out the offices, taking 3 to 9 months, purchase new furniture that depreciates fast and costs tens to hundreds of thousands of dollars, and will have to spend thousands of dollars in marketing. This is all just to open the doors and get started. By buying an existing space, it’s about using seasoned operator’s special skills that are acquired through experience and leveraging their brand to turn around the space.
Acquiring an existing coworking space is a growth strategy that hasn’t really existed until now with DenSwap. Luckily, now local chains can easily grow as fast as the national chains with a platform to see what spaces are available. Start taking a look at available coworking spaces for sale in the US by creating an account – why not start with this listing in Seattle? You can start conversations with the space owners directly with DenSwap’s communication system.
Can’t find what you’re looking for? Our account managers can match you with our network of sellers and private listings – reach out to us at hello@denswap.com and we’ll get back to you ASAP. It’s a great time to grow.
