How Dallas Coworking Spaces Are Transforming the Modern Workplace

Written by:

Rudi Davis

Date:

30 Mar 2026

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Independent operators and institutional landlords entering flexible workspace often design spaces around hot desks and open collaboration areas, overlooking the product that generates the most revenue and retention: private offices.

The coworking industry is built on a misconception about its core product, according to Jamie Russo, Founder and CEO of Everything Coworking, based in Dallas. The firm advises operators and asset owners launching flexible workspaces. Many new operators, and even institutional landlords, assume that coworking is primarily about open, collaborative hot-desk environments, but this assumption undermines profitability. Russo says this belief has led to the failure of spaces that looked promising on paper but could not generate sustainable revenue.

“There’s a model that never penciled out, which is a model without significant space dedicated to private offices,” Russo says. The enduring myth is that coworking means hot desks and open space, when in reality these configurations rarely support a profitable business.

Private Offices Drive Coworking Profit

Private offices are the backbone of successful coworking operations, commanding premium pricing and generating the longest customer lifetime value. As more traditional office landlords reposition their assets toward flexible workspace, understanding this reality is critical.

The popular image of coworking, open areas filled with freelancers and entrepreneurs, does not reflect how most people actually work. Most professionals cannot be productive in open environments, especially as remote and hybrid work have made video calls a daily necessity.

“Most people can’t work in an open space. They’re talking out loud on calls. They need sound privacy,” Russo says. Russo adds that the private office is the most popular product in a coworking space and retains users the longest.

The need for sound privacy has grown as video conferencing has become standard. Workers who spend much of their day on video calls cannot function in open environments without disrupting others or sacrificing productivity and confidentiality.

Private offices generate higher per-square-foot revenue than hot desks or dedicated desks in open areas. Private office users also stay longer, reducing churn and customer acquisition costs. Hot desk users, by contrast, are often transient, using the space sporadically or for brief periods.

Russo is direct about the consequences of getting the product mix wrong: “If you start a space that does not have enough office product and office products that are the right size for your user, you will never be profitable.”

Landlords Share the Same Misconception

This misunderstanding is not limited to independent operators. Russo regularly encounters the same misconception among institutional asset owners exploring flexible workspace to reposition underperforming office buildings.

These landlords often imagine coworking as a way to activate underused space with minimal investment: open areas with communal tables, a few phone booths, and shared amenities. This approach does not address what users need or are willing to pay for.

The primary challenge is that private offices require more upfront investment in construction and demising. Open space is cheaper and faster to build, which appeals to operators and landlords seeking to minimize upfront costs. These short-term savings lead to long-term revenue problems that cannot be resolved through marketing or operational adjustments.

Russo’s consulting work often involves correcting these misconceptions before clients sign a lease or begin construction. Russo helps operators and landlords understand that the success of a coworking space is largely determined before it opens, based on location, deal structure, and product mix.

“The success of your business is defined before you ever open your doors,” Russo says. “Your location, your real estate deal structure, and your product mix dictate your ability to be profitable, and you have to make all of those decisions before you ever open.”

Private Offices Define Market Success

The persistence of the hot desk myth has direct consequences for how the flexible workspace market develops. As more landlords and operators enter the market, those who design around private offices will have a structural advantage.

For independent operators, the lesson is clear: allocate the majority of rentable square footage to private offices sized appropriately for the target market. For landlords considering management agreements, product mix should be a central consideration. Operators who propose designs with heavy emphasis on open space and minimal private offices are either inexperienced or relying on unrealistic financial projections.

The market remains fragmented, with most operators managing between one and five locations. Only a few brands, including IWG (which operates Regus and Spaces), Industrious, and WeWork, have significant national footprints. The rest of the market consists of independent operators, many of whom enter the business without a clear understanding of what drives profitability.

As these operators launch and work to stabilize, the gap between spaces built around private offices and those that are not will become increasingly clear. Spaces that cannot generate sufficient revenue per square foot will face pressure from landlords, lenders, and cash flow constraints. Those who survive the typical 18-month ramp-up period will be the ones who prioritized private offices from the start.

How Everything Coworking Advises Clients

Russo’s background includes eight years of operating two coworking locations and five years as executive director of the Global Workspace Association, giving her both operational and industry-wide perspectives.

The firm’s approach begins with identifying the ideal customer, designing the product the customer needs, and structuring the financial model to ensure profitability. This includes decisions about private office allocation, sizing, pricing, and amenities, all made before construction begins.

For asset owners, Everything Coworking also manages RFPs to identify experienced operating partners. Landlords are increasingly seeking operators with proven track records, established executive teams, and realistic expectations about ramp-up timelines and owner distributions.

The private office insight is one example of how operational realities differ from industry perceptions. As flexible workspace grows as a share of office inventory, Russo cites Dallas as a leading market, with over 3% of its office space in coworking. Knowing what drives profitability will separate successful operators from those who struggle or fail.

Coworking Success Requires the Right Product

The next phase of the flexible workspace market will be defined by operators and landlords who understand the central role of private offices in driving profitability. As more traditional office portfolios incorporate coworking, those that rely on open-space and hot-desk models will face persistent financial challenges.

For new entrants, the path to profitability is clear: design for how people work, not for aesthetics or short-term cost savings. Those who make the right product decisions before opening will build sustainable businesses, while others will continue to repeat the industry’s most costly mistake.