Many brokers will tell you that once a company reaches 4 to 6 people, leasing your own office beats coworking. A direct lease gets you far more space for your money, and coworking can get pricey as a team grows. But when I ran a full side-by-side for a client, counting every cost a coworking membership already includes, the gap was much smaller than I expected.
First, a quick definition: a direct lease means you rent space directly from a building's landlord, your own office on your own terms and your own build-out, rather than paying a monthly membership to a coworking operator for space they run.
The short answer
Coworking usually makes sense for small teams that value flexibility or expect their headcount to change. A direct lease usually makes sense for stable teams that want more space, their own identity, and a longer commitment. Either way, the right answer comes from the all-in cost, not the headline rent.
What a coworking membership includes
These are costs you typically don't pay separately in coworking. With a direct lease, each of these is a separate bill or an upfront cost:
One monthly fee per desk or office covers all of the above.
What does coworking cost?
Coworking is priced per person, per month, and it varies a lot by operator, by neighborhood, and by how much space and privacy you want. The listed price is usually a starting point, not the final number, so there is often room to negotiate.
If it is just you, there are a few tiers, from least to most expensive:
A shared or hot-desk membership, where you get access to the open common space but no assigned spot. The cheapest option.
A dedicated desk, your own assigned desk in a shared area.
A private office for one, your own enclosed room.
A multi-location membership, which lets you work out of any of the operator's locations. Good if you travel or want flexibility over a fixed desk.
Teams almost always take their own private office, or a few offices, sometimes called a serviced office: a private, furnished room inside a managed space, with the operator still handling reception, cleaning, and the building. The more desks you need and the more privacy you want, the higher the per-person cost climbs, which is exactly why the comparison to a direct lease matters as you grow.
How to run the all-in comparison yourself
To compare fairly, put both options on the same basis: all-in cost per person, per month, over the same length of time. Here is how.
For coworking, add up:
The monthly membership, per desk or per office, times the number of people.
Any one-time setup fee or deposit, spread across your expected term.
Divide that by your headcount and you have your all-in cost per person.
For a direct lease, add up the monthly equivalent of:
Base rent.
Your share of the building's operating expenses and real estate taxes (often called additional rent), plus the annual rent escalations.
Electric, internet, and IT.
Furniture and move-in setup, spread across the lease term.
Cleaning, coffee, and kitchen supplies.
Insurance, and any build-out the landlord does not cover, spread across the term.
One-time costs like moving and legal review of the lease, spread across the term.
One thing that is usually not a cost to you: a tenant rep broker's fee is typically paid by the landlord, so having representation does not add to this total.
Divide that by your headcount, and you have the same number: all-in cost per person, per month. Now you are comparing like for like, instead of a coworking desk price against a base rent figure that leaves out half the costs.
A quick illustration, with round numbers just to show the method: say coworking runs about $700 per desk a month, so a ten-person team is $7,000 all in. A direct lease for a similar team might show roughly $5,000 in base rent, and once you add about $1,500 a month for operating costs, electric, internet, furniture spread over the term, and cleaning, you land near $6,500, modestly less than coworking and with more space, but far closer than the headline rent made it look. Your real figures will differ, which is exactly why it is worth running with actual quotes.
Why attendance changes the math
A lease costs the same whether the office is full or empty, which matters more than most teams expect. Take that same ten-person team. If everyone comes in five days a week, the rent is spread across a lot of desk-days. If the team is hybrid and comes in three days a week, you are paying the same rent for far fewer days of actual use, so the real cost for each day someone is there goes up. Coworking, priced per person, flexes with how your team actually works. This is why a hybrid team sometimes finds that the office it already leases is more expensive than it looks on the invoice.
Pros and cons
- Flexible terms
- Move-in ready
- One predictable monthly cost
- Easy to add or remove desks
- Amenities included
- A built-in community that can mean introductions and less isolation than working from home
- Less space per person
- Less privacy, and confidential calls and documents need more care
- Shared meeting rooms can fill up at busy times
- Open areas can get noisy for focused work
- Little room for your own branding or signage
- The operator sets the rules and can raise the price at renewal
- More space for your money
- Your own brand, signage, and layout
- Full control of the space
- Predictable, negotiated rent over a longer term
- Longer commitment (often 3 to 10 years)
- Upfront costs
- A lease that needs an attorney to review
- Vendors to manage
- Harder to shrink if your team gets smaller
Which is right for your team?
Freelancers and very small teams: a coworking membership, a dedicated desk, or a day pass is usually all you need.
Small teams of roughly 2 to 15: a private office inside a coworking space often hits the sweet spot, your own door and storage, with the amenities handled.
Fast-hiring startups: if you cannot predict headcount 18 months out, coworking's flexibility is worth a lot, and a long lease is a bet you do not have to make yet.
Hybrid or mostly-remote teams: you may not need a permanent office at all, a mix of day offices, meeting rooms, and a shared space can cover it.
Stable teams who are in most days: once headcount settles and people are in daily, a direct lease usually wins on cost per person and gives you a space of your own.
Signs you have outgrown coworking
You regularly can't get a meeting room when you need one.
Clients visit often, and the shared space no longer fits the impression you want to make.
Confidential calls and documents have become a daily thing.
You need permanent storage or equipment on site.
Your monthly membership total is creeping toward what a comparable lease would cost.
How to decide
How sure are you about your headcount over the next 2 to 3 years?
How long are you willing to commit?
Does a private, branded space matter for clients or recruiting?
My take
Don't compare a coworking desk price to base rent per square foot. Compare the all-in monthly cost per person over the full term, and factor in how many days your team actually comes in. I can run that comparison for you, with coworking and a direct lease side by side, so you can see which one actually costs less for your team.
Common questions
Should I use a broker for coworking?
Yes. Many people assume coworking is a take-it-or-leave-it price you book online. In practice, most coworking operators work with tenant rep brokers, and there is often room to negotiate on price, term, move-in incentives, and what's included. A broker knows which operators have space to fill and what other members are actually paying. As with a traditional lease, the operator typically pays the broker's fee.
Can I negotiate a coworking membership?
Often, yes. Longer terms, larger teams, and spaces that need to fill desks all create room to negotiate. The listed price is usually a starting point, not the final number.
Do coworking spaces require a security deposit?
Usually, yes. Many operators ask for a deposit, often one or two months of the membership fee, depending on the term and your company's financials.
Can I move from coworking into my own lease later?
Yes. Many teams start in coworking and move into their own space once headcount settles. Start looking 6 to 12 months before your coworking agreement ends so you have time to compare options and build out a space if needed.
Weighing coworking against your own office?
I'll run the all-in comparison side by side for your team.