This article was written by our expert who is surveying the industry and constantly updating the business plan for a coworking space.
The coworking space industry has matured into a profitable sector with clear financial benchmarks that guide successful operators.
Understanding these revenue patterns, cost structures, and profit margins is essential for anyone planning to enter this competitive yet rewarding market.
If you want to dig deeper and learn more, you can download our business plan for a coworking space. Also, before launching, get all the profit, revenue, and cost breakdowns you need for complete clarity with our coworking space financial forecast.
The coworking space industry shows distinct performance patterns based on size and location, with clear benchmarks for revenue and profitability.
Multi-location operators consistently outperform single-site facilities through economies of scale and operational efficiency.
| Metric | Small Spaces (Under 50 desks) | Medium Spaces (50-150 desks) |
|---|---|---|
| Monthly Revenue | $12,000 - $25,000 | $40,000 - $70,000 |
| Annual Revenue | $150,000 - $300,000 | $480,000 - $850,000 |
| Average Occupancy Rate | 60-70% | 68-75% |
| Breakeven Timeline | 12-18 months | 12-24 months |
| Net Profit Margin | 5-10% | 10-15% |
| Property Cost Ratio | 35-45% of revenue | 30-40% of revenue |
| Membership Fee Share | 75-80% of total revenue | 75-85% of total revenue |
What is the current global average monthly revenue per coworking space, broken down by small, medium, and large operators?
Coworking space revenue varies dramatically based on size and location, with clear benchmarks emerging across operator categories.
Small coworking spaces with under 50 desks generate between $12,000 and $25,000 monthly, translating to annual revenues of $150,000 to $300,000. These smaller facilities typically serve local communities and freelancers with basic amenities and flexible membership options.
Medium-sized operations housing 50 to 150 desks achieve monthly revenues between $40,000 and $70,000, reaching annual totals of $480,000 to $850,000. These spaces often target small businesses and growing startups with enhanced services and professional environments.
Large coworking spaces with 150 or more desks command the highest revenues, generating $100,000 to $250,000 monthly and $1.2 million to $3 million annually. These premium facilities cater to established companies and offer comprehensive business services, prime locations, and extensive amenities.
Location remains the primary revenue driver, with urban centers significantly outperforming suburban and rural markets across all size categories.
What is the typical annual revenue range per coworking location in major cities versus smaller markets?
Geographic location creates substantial revenue disparities in the coworking industry, with major metropolitan areas commanding premium pricing.
Major cities consistently generate annual revenues exceeding $3 million per location for large operators, with some premium spaces in New York, London, and San Francisco reaching $4-5 million annually. These markets benefit from high demand, corporate clients, and the ability to charge premium membership fees ranging from $400 to $800 per month.
Secondary cities typically see annual revenues between $800,000 and $2 million for medium to large spaces, reflecting lower operating costs but also reduced pricing power. These markets often serve as expansion targets for established operators seeking growth opportunities.
Smaller markets and rural areas generate more modest revenues, averaging $250,000 to $400,000 annually even for well-positioned spaces. However, these locations often benefit from lower rent costs and reduced competition, maintaining healthy profit margins despite lower absolute revenues.
The revenue gap between major cities and smaller markets continues to widen as urban demand for flexible workspace solutions accelerates.
What percentage of revenue usually comes from membership fees compared to other income streams such as day passes, events, or ancillary services?
Membership fees form the backbone of coworking space revenue, typically accounting for 75-85% of total income across all operator sizes.
| Revenue Stream | Percentage of Total | Description |
|---|---|---|
| Monthly Memberships | 60-70% | Dedicated desk and office rentals with consistent monthly billing |
| Hot Desk Memberships | 15-25% | Flexible seating arrangements and coworking access plans |
| Meeting Room Rentals | 8-12% | Hourly and daily conference room bookings from members and non-members |
| Day Passes | 3-6% | Single-day access for visitors and occasional users |
| Event Space Rentals | 2-5% | Corporate events, workshops, and private gatherings |
| Virtual Office Services | 2-4% | Mail handling, business address, and phone services |
| Other Services | 1-3% | Printing, parking, food and beverage, storage lockers |
Ancillary services contribute the remaining 15-25% of revenue and serve as important profit enhancers due to their typically higher margins. Successful operators focus on diversifying these income streams to reduce dependence on membership fees and create additional value for members.
What is the average occupancy rate that coworking spaces achieve, and how does it impact revenue predictability?
The global average occupancy rate for coworking spaces stands at 68%, with significant variations based on location and market maturity.
Major metropolitan markets consistently achieve occupancy rates of 75-90%, driven by high demand from corporate clients and established professional communities. These higher occupancy rates provide predictable revenue streams and justify premium pricing strategies.
Smaller markets typically operate at 55-70% occupancy, reflecting lower local demand but also reduced competition. These spaces often require longer ramp-up periods but can achieve sustainable profitability at lower occupancy thresholds due to reduced operating costs.
Occupancy directly impacts revenue predictability, with spaces needing 70-75% occupancy to reach breakeven. Successful operators implement waitlists and flexible membership tiers to optimize capacity utilization and maintain consistent revenue flow.
Spaces achieving 80-90% occupancy often expand their facilities or increase pricing to balance demand with available capacity, creating sustainable long-term growth.
What are the main cost drivers in operating a coworking space, and what is the typical cost breakdown as a percentage of revenue?
Coworking space operations involve five primary cost categories that typically consume 90-95% of total revenue.
Property costs represent the largest expense, accounting for 30-40% of revenue in most markets and potentially exceeding 40% in prime urban locations. This includes base rent, property taxes, insurance, and common area maintenance fees that form the foundation of operational expenses.
Staff salaries constitute 25-30% of revenue, covering community managers, cleaning staff, reception personnel, and administrative roles. Larger spaces often achieve better staff cost ratios through economies of scale and operational efficiency.
Operational and maintenance expenses consume 10-15% of revenue, including utilities, internet infrastructure, equipment maintenance, supplies, and daily operational necessities. These costs remain relatively stable regardless of occupancy fluctuations.
Marketing and member acquisition costs typically range from 5-10% of revenue, encompassing digital marketing, events, partnerships, and promotional activities essential for maintaining healthy occupancy rates.
You'll find detailed cost analysis in our coworking space business plan, updated every quarter.
What are the industry benchmarks for gross margins and net profit margins in coworking spaces?
Coworking spaces operate with distinctive margin structures that reflect their service-based business model and fixed-cost dominance.
Gross margins typically range from 30-35% across the industry, remaining relatively consistent due to the standardized nature of workspace services. These margins reflect the difference between membership revenue and direct service costs, excluding property and administrative expenses.
Net profit margins vary significantly by operator size and efficiency, with small single-location spaces achieving 5-10% margins, medium operators reaching 10-15%, and large multi-location operators often exceeding 15-20%. These variations reflect economies of scale and operational sophistication.
EBITDA margins for well-performing spaces range from 10-20%, with industry leaders achieving margins above 25%. These metrics exclude depreciation and financing costs, focusing on operational performance and cash generation capabilities.
Premium locations and established operators consistently outperform industry averages through higher pricing power, operational efficiency, and diversified revenue streams that enhance overall profitability.
How long does it typically take for a coworking space to reach breakeven from launch?
Breakeven timelines vary significantly based on space size, location, and operational efficiency, with most spaces achieving profitability within 12-36 months.
Small coworking spaces with under 50 desks typically reach breakeven in 12-18 months, benefiting from lower initial investment requirements and simplified operations. These spaces often achieve profitability quickly but face limitations in scaling revenue and maximizing returns.
Medium-sized operations require 12-24 months to reach breakeven, balancing higher initial costs with increased revenue potential. These spaces must achieve 70-75% occupancy to cover operating expenses and begin generating profits.
Large coworking spaces face the longest breakeven periods of 18-36 months due to substantial initial investments, complex operations, and longer lease-up periods. However, these facilities often achieve higher absolute profits once established.
Market conditions, competition, and management experience significantly influence breakeven timelines, with experienced operators typically achieving profitability faster through proven systems and operational expertise.
What is the average EBITDA margin for coworking spaces, and how does it compare across different regions?
EBITDA margins serve as key performance indicators for coworking space profitability, showing clear regional patterns and operational benchmarks.
| Region | Average EBITDA Margin | Key Factors |
|---|---|---|
| North America | 15-25% | High membership fees, established market demand, premium service offerings |
| Western Europe | 12-20% | Mature markets with stable demand, moderate labor costs, regulatory compliance |
| Asia-Pacific | 18-28% | Rapid growth markets, lower labor costs, high urban density |
| Latin America | 10-18% | Emerging markets with price sensitivity, growing professional class |
| Middle East/Africa | 8-15% | Developing markets, infrastructure challenges, economic volatility |
| Eastern Europe | 12-22% | Growing markets, competitive pricing, increasing corporate adoption |
| Global Average | 10-20% | Varies significantly by local market conditions and operator efficiency |
Regional variations reflect local economic conditions, labor costs, property markets, and cultural adoption of flexible workspace concepts, creating distinct opportunities and challenges for operators in different markets.
What are the standard lease or property cost ratios relative to total revenue in this industry?
Property costs represent the largest single expense category for coworking spaces, with lease expenses typically consuming 30-40% of total revenue.
Prime urban locations often push property costs above 40% of revenue, reflecting high real estate values and competitive market dynamics. These locations justify higher costs through premium pricing and superior occupancy rates that offset increased expenses.
Secondary markets typically maintain property cost ratios between 25-35% of revenue, offering better cost structures while potentially limiting pricing power. These markets provide attractive expansion opportunities for established operators seeking improved margins.
Successful operators negotiate lease terms that include percentage rent clauses, tenant improvement allowances, and flexible expansion options to manage property costs effectively. Long-term leases often provide cost stability but require careful demand forecasting.
This is one of the strategies explained in our coworking space business plan.
What role does scale play in profitability—do multi-location operators consistently achieve better margins than single-location operators?
Scale creates substantial competitive advantages in the coworking industry, with multi-location operators consistently outperforming single-site facilities across key profitability metrics.
Multi-location operators achieve net profit margins of 20-30% compared to 5-10% for single-location spaces through operational efficiencies, centralized services, and economies of scale. These operators benefit from shared technology systems, bulk purchasing power, and standardized operational procedures.
Large operators maintain higher average occupancy rates through cross-location marketing, corporate account management, and brand recognition that drives consistent demand. They also achieve better lease negotiations and reduced per-location administrative costs.
Single-location operators face challenges in marketing costs, technology investments, and operational expertise that limit profitability potential. However, they often succeed in niche markets or specialized communities where personalized service creates competitive advantages.
The profitability gap between scaled and single operators continues widening as technology requirements, customer expectations, and operational complexity increase throughout the industry.
What recent trends in pricing, demand, or service diversification are most significantly impacting coworking revenue and profitability?
Several key trends are reshaping coworking space revenue models and profitability structures in 2025.
- Hybrid work adoption - Corporate clients demand flexible access options rather than dedicated desks, creating new membership tiers and revenue opportunities
- Service diversification - Spaces generate additional revenue through event hosting, virtual office services, wellness programs, and professional development offerings
- Technology integration - Automated booking systems, mobile apps, and smart building features reduce operational costs by up to 20% while enhancing member experience
- Niche specialization - Industry-specific spaces command premium pricing and achieve higher retention rates through targeted community building
- Subscription model evolution - Dynamic pricing based on demand patterns and usage analytics optimizes revenue per square foot
These trends enable successful operators to diversify revenue streams, reduce operational costs, and create differentiated service offerings that command premium pricing in competitive markets.
What are the most up-to-date industry benchmarks for return on investment and payback periods in coworking operations?
Return on investment metrics provide clear guidance for coworking space financial planning and investor expectations.
Initial startup costs for a typical 3,000 square foot space accommodating 100 desks range from $94,000 to $126,000, including furniture, technology infrastructure, renovation, and working capital requirements. These investments form the baseline for ROI calculations.
Successful coworking spaces achieve 25% ROI over five-year periods, based on 10% annual net profit margins and consistent operational performance. This benchmark reflects mature, well-managed facilities operating at optimal occupancy levels.
Payback periods typically range from 2-3 years for spaces meeting operational targets and achieving projected occupancy rates. Multi-location operators often achieve faster payback periods through operational efficiencies and economies of scale.
We cover this exact topic in the coworking space business plan.
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.
The coworking space industry offers clear pathways to profitability for operators who understand market dynamics and operational requirements.
Success depends on achieving optimal occupancy rates, managing property costs effectively, and developing diversified revenue streams that serve evolving member needs.
Sources
- Optix - Coworking Space Profitability
- Optix - UK Coworking Market
- Deskmag - Global Coworking Space Trends 2025
- Sharp Sheets - How Profitable Are Coworking Spaces
- Grand View Research - Coworking Spaces Market Report
- Coworking Cafe - National Coworking Report
- Allwork.Space - 12 Creative Ways Coworking Spaces Generate Revenue
- Optix - US Coworking Industry Benchmarks
- OfficeRnD - Are Coworking Spaces Profitable
- Optix - Cost of Starting a Coworking Space
