In this series of articles we explore the complex dynamic between providers of coworking space and the intermediary companies that supply them with client enquiries, to understand: what is a coworking broker?

Understanding how this landscape is evolving and how it impacts the customer journey in search of their perfect flexible office will provide important insight to make the relationships involved more transparent and easy to navigate.

This first segment focuses on:

• Defining the concept of a coworking brokerage
• Explaining the history of how it started interacting with the flex space sector

What is a coworking broker?

If you have ever considered flexible office space (or flex space, co-working, serviced offices, space-as-a-service and many other derivations of the concept) then you have almost inevitably come across companies that offer to navigate this landscape for you.

(Quick disclaimer: this series is written with a specific focus on the UK coworking and brokerage sector. It is the most mature and evolved marketplace worldwide with the most nuances and complications, and a fascinating history.)

If you have engaged with a flex space intermediary, almost exclusively their positioning is based on several fundamentals:

• They have access to the entire flexible office space market
• They can negotiate the best possible deal for you
• They are free of charge to use

For the purpose of definition moving forward, we will try to refer to the flexible office market as “coworking” or “flex space” and to the intermediaries that service this market as “brokerages”.

The reasoning is that “coworking” as a term has been adopted to define a sub-market as a whole (a sub-market of commercial real estate or “office space”) as opposed to a distinct product tranche within that sub-marketplace (but that’s another discussion). “Flex space”, on the other hand, is an easy shortening of flexible office space which is self-explanatory to a large degree.

Equally, “brokerage” is a term that best describes the mechanics of those consultancies which service the coworking market with prospective customers.

“A broker is a person or firm who arranges transactions between a buyer and seller. This may be done for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neither role should be confused with that of an agent – one who acts on behalf of a principal party in the deal”

“Brokers can furnish market research and market data. Brokers may represent either the seller or the buyer but generally not both at the same time. Brokers are expected to have the tools and resources to reach the largest possible base of buyers and sellers. They then screen these potential buyers or sellers for the perfect match.”

This definition is straightforward and stands true to how the coworking market dynamic operates vis-a-vis the brokerage community. I will refer to it when exploring the nuances of what customers should be aware of in order to understand ‘how things work’ during their search for flexible office space.

Coworking as a product has been around for a long time.

The idea of office space provided fully furnished, fully connected and fully managed by a building operator on behalf of the client, often with the added allure of very flexible contract terms and ancillary amenities of all sorts, is very appealing to a significant proportion of businesses.

“Serviced Offices”, which used to be the name the flex space sector was known by, literally did what it said on the tin. You rented an office, and it was serviced on your behalf as part of the contract package.

The most basic appeal is that it is much simpler to take advantage of an off-the-shelf product curated to match your particular needs than to invest time and money to create that environment yourself within a blank-canvas office space leased via a long-term contract from a landlord, as was traditionally the case for 100’s of years.

Coworking brokerage: How it Started  

In the late 90’s and early 00’s several companies saw the opportunity in this growing market to act as a conduit between the tenant and the office provider – they set out to position themselves in front of tenants by leveraging the massive growth in online search volume.

The principle was simple: whenever a tenant searches for offices in a particular location, our website will be the first thing they see. The primordial aim of PPC (pay-per-click) and SEO (search engine optimisation) strategy.

It worked fantastically well – for the same reason that it’s easier to go to comparethemeerkat than to trowl through stacks of specialist companies you know nothing about. A single point of origin that can maximise your level of choice and leverage market competition for your business to ensure best value is achieved.

It worked also because the coworking sector was so obscure at the time. Regus (now IWG) was pretty much the only brand customers could name. Most customers would define the sector through statements along the lines of “what, like Regus?” or “please, not like Regus” depending on their experience.

So what is a coworking brokerage? It’s an intermediary concept readily accepted by clients – they want more choice from a market they don’t understand and they want someone independent “on their side” that is “in the know”.

Incidentally, the landscape of coworking in the mind of the tenant is not much different today – the notable rise and fall of WeWork has been a vast catalyst for making the good and bad of this commercial real estate sub-segment visible to the layman, but the overall scale and diversity of the sector is still not something customers generally have a good handle on unless they are exposed to it through a broker.

So, to massively over-simplify, in 20-odd years we have moved from “what, like Regus?” to “what, like WeWork or Regus?” in terms of macro-level consumer recognition. This is not unusual, nor is it wrong, nor is it meant to take away from the huge success of other major brands in the space. Most sectors are defined by a small number of well-recognised brands and most of the iceberg always remains underwater.

But the mechanics of the brokerage sector within coworking are much less understood. Most customers view it in the same way as the myriad comparison sites which have become a staple in finding one-stop-shop solutions to product and service needs online.

Since coworking brokerages and intermediaries in general have cornered a huge chunk of market share (they account for 80%+ of all enquiry flow to the flex space sector), gaining a deeper understanding of how coworking brokerage works will allow customers to interact with it better and get more value.

What to expect from the next segment: 

In the next segment of this series we will explore:

• Understanding how coworking brokerages are paid for their services
• How this evolved as a result of increased competition
• How the relationship between brokerages and coworking operators is supposed to work optimally