Co-Working at the Turning Point

As the COVID-19 pandemic continued through the fall of 2020, how should real estate investors assess the viability of the co-working business model?

Lisa Cations, Tomasz Piskorski  | Fall 2020
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In October 2020, while the world was still in the throes of the COVID-19 global pandemic, real estate investors were operating in a vastly changed environment. In many countries, including the United Kingdom, most estate agents had shut down their offices, with in-person viewing of properties banned, and construction of new homes and offices greatly reduced. As a result, global commercial real estate investment values had dropped significantly in 2020 as compared to the previous year. Real estate investors had to reevaluate their investments. At her firm, a London-based real estate analyst focused her research on the viability of the co-working business model. Her firm had signed long-term leases with several co-working operators, and the firm leadership wanted to assess the current outlook for these investments. This case asks students to consider how viable was the core business model of co-working, what were the key drivers of its revenue, and whether the operations of a co-working company be restructured so that they could survive the pandemic and adapt to a post-pandemic world. Students will be asked to perform financial analyses to support their assessment.

Case ID: 210306

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