The future of coworking spaces looked uncertain during the pandemic, but the CEO of Regus and Spaces’ parent company says huge opportunities lie in the industry’s near future.
IWG, the world’s biggest flexible office space company, best known in the U.S. for Regus and Spaces coworking operations, is preparing to open between 500 and 700 new coworking spaces in the U.S. in the next 12 months, founder and CEO Mark Dixon told the Washington Business Journal in an interview.
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As businesses navigate their future relationships with office spaces, many are looking to coworking spaces as options to bring shared workplaces closer to employees’ homes, sparing workers a commute without sacrificing executives’ desires for in-person professional environments.
Consequently, companies are abandoning leases as they expire and moving to coworking spaces, Dixon told the Washington Business Journal.
“People are back to normal, but what we’re seeing growth in is a lot of companies downsizing,” he said. “[Companies] don’t want space for 200-500 people and ask people to come in from New Jersey, Connecticut and Long Island to use a computer in the middle of an office.”
Like other coworking and office providers, the coronavirus pandemic was a curveball for Regus, forcing the company to file for Chapter 11 bankruptcy in 2020 for dozens of its U.S. locations.
But by last June, Regus was already bouncing back. The restructuring process allowed the company to emerge from bankruptcy on almost 100 of its troubled spaces, liquidating just eight spaces, Bloomberg Law reported at the time.
Dixon warned at the time that IWG hadn’t yet overcome all the financial hurdles it was facing, saying the company lost approximately $875M in 2020 and expected to lose more during 2021.
But IWG’s confidence in its future remained high, despite its own cautions. In July 2021, less than a month later, IWG announced plans to triple its openings from 2020 with a plan to produce more than 100 new coworking locations via 20 franchise agreements with new partners.
IWG, along with competitors WeWork and newcomers like Industrious, are all poised for takeoff this year as businesses try to navigate hybrid work arrangements.
"There has never been a stronger moment for flexible office space," WeWork President of the Americas Melinda Holland told Bisnow by email earlier this month. "The pandemic fundamentally shifted the purpose of the office, creating a market that demands flexibility and optionality more than ever."
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