The coworking monetization model rests most traditionally on the priority towards private offices.  While many businesses have numerous lines of business, often the private office memberships account for the majority of the revenue. When people ask us, “is there demand for coworking in my area,” we will often respond, “if there’s a demand for offices, then there is demand for coworking.” As a result, in the coworking space allocation strategy it is necessary to balance the allocation according to monetization priority.

In the most straightforward of terms, the coworking membership agreement is a new type of micro-leasing strategy that enables operators to charge a premium and tenants to pay and access on flexible terms. Certainly over time the coworking model has gotten more complex with the addition of new ancillary lines of business, but in the end, coworking is a rent arbitrage business, based heavily on private office inventory.

In order to experience the “coworking premium” building owners and coworking operators absorb the front end cost of setting up a fully built-out and furnished workspace, complete with a staffing solution and operational model. Creating a model like this often begins with a concept strategy and financial model to run the numbers.