What is the profit margin of a coworking space?

This article was written by our expert who is surveying the industry and constantly updating the business plan for a coworking space.

Who wrote this content?

The Dojo Business Team

A team of financial experts, consultants, and writers

We're a team of finance experts, consultants, market analysts, and specialized writers dedicated to helping new entrepreneurs launch their businesses. We help you avoid costly mistakes by providing detailed business plans, accurate market studies, and reliable financial forecasts to maximize your chances of success from day one—especially in the coworking space market.

What are the typical revenue streams of a coworking space, and how much do they generate per member?

Coworking spaces generate revenue primarily from membership fees, which account for 70-80% of total income across different seating tiers.

Hot desk memberships typically cost $350-$500 per month, translating to approximately $15-$25 per day for day pass users and $80-$125 weekly for monthly members. Dedicated desk memberships range from $600-$900 monthly, or $150-$225 per week. Private office memberships command the highest prices at $900-$2,000 per month depending on size and location, which breaks down to $210-$450 weekly.

Day passes represent an additional revenue stream for coworking spaces, typically priced at $20-$40 per day for flexible users who don't commit to monthly memberships. On an annualized basis, a typical coworking space member generates between $4,200 and $24,000 per year depending on their membership tier and usage patterns.

Beyond core memberships, coworking spaces earn 15-25% of their revenue from ancillary services including meeting room rentals, event space bookings, virtual office services, printing, storage, and food and beverage sales. These supplementary revenue streams help diversify income and improve overall profitability for coworking space operators.

What is the average occupancy rate of a coworking space, and how does it affect revenue?

The average occupancy rate for coworking spaces globally stands at 68% as of 2025, with significant variation based on location and market maturity.

Major city spaces consistently achieve occupancy rates exceeding 70%, while leading European and UK markets report occupancy levels between 80-90%. This occupancy rate directly determines the total revenue potential of a coworking space, as higher occupancy translates to more paying members and fuller utilization of available desks and offices.

Spaces operating below 60% occupancy typically struggle to cover their fixed costs and break even, making it difficult to achieve profitability. Conversely, coworking spaces that maintain 80% or higher occupancy support solid profit margins and have room for growth investments. The occupancy threshold of 60-70% represents the critical break-even point for most coworking operations, where revenue begins to exceed total expenses.

You'll find detailed market insights in our coworking space business plan, updated every quarter.

What is the average membership price range across different tiers, and what proportion of members choose each?

What additional services contribute to revenue, and how much do they add?

Meeting room rentals represent a significant ancillary revenue stream for coworking spaces, typically charging $30-$50 per hour for bookable conference rooms.

Event space rentals generate substantial income at $500-$1,500 per day, depending on the space size, location, and included amenities. Virtual office services add steady recurring revenue of $50-$150 per month per client, covering business address, mail handling, and phone answering services. Printing and storage services typically contribute an additional $10-$50 per member monthly, though usage varies significantly by member type.

Food and beverage offerings can generate $5-$15 per member per day, but this revenue stream is rarely a primary profit driver for coworking spaces and is often viewed more as a member amenity. Collectively, these ancillary services account for 15-25% of total revenue in mature coworking operations, providing important diversification beyond core membership income.

This is one of the strategies explained in our coworking space business plan.

What is the typical monthly gross revenue of a coworking space by size?

Larger coworking spaces benefit from economies of scale, spreading fixed costs across more members and generating higher absolute revenue. However, they also require higher baseline occupancy levels to remain profitable and more sophisticated operational systems to manage the increased complexity. The revenue per square foot remains relatively consistent across different sizes, indicating that scaling primarily benefits operators through improved cost efficiency rather than revenue density increases.

What are the major fixed costs for a coworking space, and how much do they amount to?

Rent represents the largest fixed cost for coworking spaces, ranging from $2-$8 per square foot per month depending on the city and neighborhood.

For a typical coworking space, this translates to $10,000-$40,000 monthly in rent expenses, with premium urban locations commanding the higher end of this range. Staffing and salaries constitute the second-largest fixed cost at $10,000-$30,000 per month, covering reception staff, operations managers, community managers, and cleaning personnel. Utilities including electricity, water, heating, and cooling typically cost $1,000-$5,000 monthly based on space size and local rates.

Insurance expenses for coworking spaces average $300-$1,000 per month, covering general liability, property insurance, and workers' compensation. When combined, total fixed costs for coworking spaces between 5,000-20,000 square feet typically range from $25,000-$75,000 monthly, or $300,000-$900,000 annually. These fixed costs must be covered regardless of occupancy levels, making them the primary challenge for new coworking space operators before reaching break-even occupancy.

What are the main variable costs per member for a coworking space?

Variable costs in a coworking space scale directly with member count and usage intensity, averaging $50-$120 per member monthly.

Internet connectivity, coffee, and basic supplies and amenities typically cost $20-$40 per member each month, representing the baseline variable cost for every active member. Cleaning services add $2,000-$7,000 monthly for the entire space, which breaks down to approximately $15-$30 per member per month when calculated at scale.

Marketing and advertising expenses range from $2,000-$10,000 monthly, though this cost decreases on a per-member basis as the space scales and word-of-mouth referrals increase. Additional variable costs include maintenance, minor repairs, consumables like toilet paper and paper towels, and member event expenses. The total variable cost structure means that each new member adds relatively predictable incremental costs while contributing their full membership fee to revenue, which is why occupancy growth directly improves profitability in coworking spaces.

What is the average gross margin percentage, and what does it mean in dollars?

Coworking spaces typically achieve gross margins of 50-70% after subtracting variable costs from revenue, retaining $200-$400 per member monthly before fixed costs.

This gross margin percentage represents the amount of revenue remaining after covering direct member-related costs like internet, coffee, cleaning supplies, and incremental amenities. For example, a member paying $600 monthly for a dedicated desk with variable costs of $80 per member would generate a gross margin of $520, or approximately 87%. However, when averaged across all member types and ancillary services, the blended gross margin settles into the 50-70% range.

The dollar amount retained as gross margin must then cover all fixed costs including rent, full-time staff salaries, utilities, and insurance. Only after these fixed expenses are paid does the coworking space generate net profit. This is why higher occupancy is critical—each additional member contributes their gross margin dollars toward covering the same fixed cost base, dramatically improving profitability once the break-even threshold is crossed.

What is the average net profit margin after all expenses?

Net profit margins for coworking spaces typically range from 8-15% after deducting all fixed and variable expenses, with mature operators potentially reaching 20-30%.

For a member paying $600 monthly, an 8-15% net profit margin translates to $48-$90 in profit per member per month, while a well-optimized space at 20% margin would generate $120 profit per member monthly. Small coworking spaces with 80-120 members operating at 10% net margin might generate $4,000-$7,800 in monthly profit, while medium spaces with 130-220 members could earn $8,500-$19,800 monthly at similar margins.

Large coworking operators with 250-450 members benefit from economies of scale and can achieve net profits of $20,000-$54,000 monthly at 15% margins, or $40,000-$108,000 monthly at 30% margins in optimal conditions. The wide variation in net profit margins depends heavily on location, occupancy rates, operational efficiency, member mix, and the effectiveness of ancillary service offerings. Urban locations with high demand can command premium pricing, while spaces in less competitive markets may struggle to achieve double-digit margins.

We cover this exact topic in the coworking space business plan.

How do margins evolve as occupancy increases, and when does a space reach break-even?

Coworking space margins improve dramatically as occupancy increases because fixed costs remain constant while revenue and gross profit scale with each additional member.

Most coworking spaces require 60-70% occupancy to reach their break-even point, where total revenue equals total expenses. Below this threshold, the space operates at a loss as revenue fails to cover the substantial fixed cost base of rent, staffing, and utilities. Once a coworking space crosses the break-even occupancy threshold, each additional member contributes their gross margin (typically $200-$400 monthly) almost entirely to net profit, since fixed costs are already covered.

A space operating at 80% occupancy will generate significantly higher net margins than the same space at 65% occupancy, even though the revenue difference may seem modest. For example, a 10,000 square foot space with 175 members at 70% occupancy might break even, while the same space with 200 members at 80% occupancy could generate 15-20% net margins. This non-linear profit improvement with occupancy growth explains why coworking operators focus intensively on member acquisition, retention, and minimizing churn during their first 18-24 months of operation.

What strategies are most effective to improve coworking space margins?

1. Upsell premium services and ancillary offerings: Actively promote meeting room rentals, event space bookings, virtual office packages, and premium add-ons to existing members. Each ancillary service adds high-margin revenue with minimal incremental cost, directly improving net profitability without requiring additional members.
2. Optimize space utilization with flexible layouts: Design the coworking space with movable furniture and adaptable zones that can shift between hot desks, dedicated desks, and private offices based on demand. This flexibility allows operators to maximize revenue per square foot by adjusting the space mix to match current member preferences.
3. Target corporate teams and long-term office rentals: Focus marketing efforts on attracting small to medium-sized teams seeking private offices with 6-24 month commitments. These corporate memberships provide stable, predictable revenue with lower churn rates compared to individual freelancers, improving financial sustainability.
4. Implement dynamic pricing and longer-term contract discounts: Use demand-based pricing that adjusts monthly rates based on occupancy levels and seasonal patterns. Offer 10-20% discounts for annual commitments to lock in stable revenue and reduce churn-related vacancy costs.
5. Reduce churn through community building and quality amenities: Invest in high-quality coffee, fast reliable internet, comfortable furniture, regular member events, and active community management. Lower churn rates reduce the constant marketing and sales costs associated with replacing departed members, directly improving net margins over time.

What are the margin differences between membership types and ancillary services?

Successful coworking space operators balance these revenue segments by building a foundation of core memberships, prioritizing private office rentals for stability, and actively upselling high-margin ancillary services to maximize profitability and create resilience against market fluctuations.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to consult with a qualified professional before making any investment decisions. We accept no liability for any actions taken based on the information provided.

Sources