Blackstone thinks it has already spotted one of the big opportunities of the next downturn.

A rush of companies and investors coming into the coworking sector late in the cycle with little knowledge of running those businesses will create an opportunity for consolidation, Blackstone Managing Director in the U.K. James Lock said.

Speaking at a CBRE event, Lock said that as the economy slowed, some market participants would become distressed and provide opportunities, EG reports.

“There are a lot of firms potentially coming to the sector late who haven’t got the insight around how you operate and run these businesses,” he said. “They are like hotel businesses. It’s about the bottom line, it’s about efficiency of management, it’s about practical management and people can get caught out, and so consolidation will arise and there will be some adjustment.

“We believe there will be some shuffling of cards over the next two or three years, and how the market responds to that will create great opportunities.”

Last year Blackstone bought a majority stake in The Office Group in a deal that valued the company at more than £500M. It is expanding TOG by securing new sites and looking to take it into Europe, but it could also serve as a platform for consolidation when the reckoning comes for the flexible workspace sector.

In an interview with Bisnow, TOG co-founder Charlie Green gave insight into the kind of revenue declines flexible workspace companies could expect in a recession if they managed their portfolios well. He said that good asset management had limited the decline in turnover to 12% in the last recession.