Weekly Editorial

Office Furniture's Shift Towards Coworking Spaces

Written By Rob Kirkbride, Editor-in-chief, OI Publications • March 25, 2024

The Insider_Weekly_editorial_3.25.24

I read several stories this week in The New York Times on topics that greatly affect the office furniture industry. The first dealt with the transition of a former New York City office building into living spaces. The second revolved around how cities reliant on taxes from commercial property are facing shortfalls in an urban “doom loop.”

One doom loop scenario goes something like this: Workers are not returning to the office, which leads to a dramatic reduction in city taxes, which leads to a dying downtown, which leads to more workers leaving the office. Another version of the doom loop scenario posits that commercial real estate companies, faced with diminished demand because workers are not returning to the office, will go bankrupt, leaving banks holding the bag and forcing some of them out of business, which would cause disastrous problems for the economy. Obviously, either scenario would be trouble for the office furniture industry.

So how can the office furniture industry protect itself from the new realities of work and a long-term reduction in office space (and office furniture)? I think office furniture companies should rethink a trend: coworking.

The idea of coworking and how it might be used has changed since the pandemic. In the WeWork days, solopreneurs filled the spaces with a smattering of corporate customers who used coworking spaces for project teams and to flex space up or down as needed.

Coworking going forward will look much different than it has in the past. Companies looking to shed space will continue to do so, but they are going to need spaces for their employees to work and collaborate. Coworking is going to have an expanded role in the real estate strategy of many companies.

So instead of waiting for coworking companies to order office furniture, why don’t office furniture companies create coworking spaces? Steelcase was an early advocate for coworking and years ago set up a few spaces of its own to tap into the trend. It was on the cutting edge of thinking when it came to coworking. But as coworking changed and companies like WeWork began dominating the space, Steelcase took a step back.

The demise of WeWork and changes to the way we work make coworking an attractive play for office furniture makers. There is an opportunity (currently being missed) by office furniture makers to build out branded coworking centers, fill them with their own furniture and market them to corporate customers who are desperate to find some way to make sense of their office space.

The office furniture industry was always well positioned to get into coworking. I wrote a column years ago advocating for dealers to turn their dead showroom spaces into coworking centers. But manufacturers are even better positioned than dealers to enter the coworking space.

As a business strategy, real estate is much different than office furniture. It is a brutally competitive business as well. But as spaces open up, office furniture companies could step in and convert some of them to coworking.

Our industry understands work better than any other industry out there. And our customers are looking for answers. Instead of sitting back as they shed space (and furniture), office furniture makers could develop coworking centers as a new income stream. These spaces would naturally act as showrooms for the company’s furniture as well, creating natural sales channels between the manufacturer and its customers.

I’m afraid the industry is waiting flat-footed for something to happen. Instead of waiting for something to happen to us, we should actively change our business models to include coworking.

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