WeWork, the leader in co-working space, recently had its market valuation drop from $48 billion to $8 billion. Admittedly there are a lot of factors in this drop. Our contention is that in a strong tech environment, the value of renting to 1-4 people is being erased.

Co-Working space really got its start in the years following the recession in 2006 to 2010, when many computer tech people became consultants as there was little growth in the tech sector for full time work. The ability to work in the cloud with other “co-workers” made it possible for an individual to work for anyone, anywhere, from their home – or a Co-Working environment.

This had a strong effect on commercial real estate in Santa Cruz, as several buildings became (and still are) home to Co-Working space. Growth was phenomenal, as groups crossed America building office space for multiple independent tenants. In the parlance of marketing, just how deep is this market? Also, as a client once said, the “tree’s won’t grow to the sky”, meaning all markets have demand growth cycles, and then
saturation. We believe in a market where consultants can work for single companies, the demand for Co-Working space has flattened.