The Pros and Cons of Private vs. Co-Working Office Space

Dec 13, 2021

When your business is a startup and you don’t know just how quickly your business will grow, the decision to lease a coworking space over a direct office can be a difficult one.

Immediate Occupancy vs. The Waiting Game– The main pros of utilizing a coworking space are that your business will have immediate occupancy and will include all of the furniture, phones, and internet access you need, ready to go in a pinch. For an independent space, you’d have to purchase your own furniture, sign a longer-term lease, and wait for improvements to be completed.

High Cost, Low Risk vs. Low Cost, High Risk– Coworking facilities clearly offer you the advantage of starting your business right away, BUT the catch is that there’s a high price to pay.  The average monthly costs of a coworking space can be 2 to 3 times higher than leasing a private office space. You also have to be concerned about your identity in a co-working facility, where it may be difficult to develop your unique brand when you’re lost in the mix of other brands/tenants in a very tight space.

Flexible Renting vs. Commitment– With a private office space, you have your own working space that can fit your needs, represent your brand, and have stronger security. The advantage of a co-working space is that renting is much more flexible. You could rent for a few weeks, to a few months, or for over a year. Whereas in private space, you will be required to sign a lease that lasts anywhere from 2 – 5 years. Of course, you can always sublease a space. The main pro of a private space is the stability it has for your business.

Amenities vs. DIY–  Most coworking spaces will offer your business several amenities, including staff support. If you need something, they will have a professional ready to help. They also offer networking and community events and services. With a direct office, this needs to be handled in-house, a.k.a….YOU.

Strong Security vs. Open Door Policy– The biggest difference, and for many companies can be the most important, is the security.  In a co-working facility, since you’re sharing space with other firms, there is always the security risk you take when leaving documents out, laptops open while you run to the kitchen, etc. Something else that business owners don’t consider is the possibility of your employees being recruited by another firm in the same coworking space. This happens much more often that one would think. With a private office, you have the ability to fully secure your business and protect your employees from direct access to competitors.

Control vs. Dependence– In a coworking space, if your business outgrows the space available at the time, the facility has the right to move your employees to another space within their building, or even another location, which is oftentimes inconvenient and puts a pause on real work as you’re your business.

Coworking facilities will tell you that when you add up all of the costs of buying furniture, phones, internet, and staff support that coworking facilities end up being cheaper than a direct space.  And direct space owners will tell you that their rent is far cheaper and that you do have the ability to create your own identity, which means that you would be able to develop a better brand for yourself more quickly.

Coworking facilities are becoming very popular for tenants in some of the most urban settings, so clearly there is demand. Meanwhile direct spaces under 10,000 ft.² are now becoming more competitive in pricing.

To determine the real differences between the two for your business, it is best to solicit a commercial real estate broker who can provide you a comprehensive comparison and identify which would be better suited to meet the needs of your business.

Photo Credit: homethods Flickr via Compfight cc

Written by: Hans Hansson

[email protected]

Hans Hansson is President of Starboard Commercial Real Estate. Hans has been an active broker for over 35 years in the San Francisco Bay Area and specializes in office leasing and investments. If you have any questions or comments please email [email protected] or call him at (415) 765-6897. You may also check out his website,