The Mandate
A serial workspace operator converting a Class B office floor to a flexible-membership product engaged Feasibility Study Consultant to prepare a third-party feasibility study supporting a SBA 7(a) financing request for a project located in Cook County, Illinois. Total project capitalization fell within the $1M-$3M band. The capital provider, a specialty SBA lender, required documentation consistent with current program review standards. The analytical question put to the team: Did West Loop knowledge-worker density and post-pandemic distributed-team behavior support 480 stabilized memberships.
Engagement Scope
- Primary market area defined as a 1-mile drive-time
- Comparable supply set of 11 properties
- Demand model framework: knowledge-worker density and flexible-membership penetration analysis
- Financial projection horizon: 5 years
- Site inspection completed; operator interviews where applicable
- Primary data collection through field reconnaissance and third-party market data
Methodology Applied
Primary Market Area
The PMA was defined as a 1-mile drive-time from the subject site, calibrated to the demand catchment behavior typical of coworking assets in Illinois. The boundary captured the population, employment, and competitive supply base relevant to the subject's operating thesis.
Supply and Demand Reconciliation
The comparable supply set comprised 11 properties operating within the PMA or in directly substitutable submarkets. Demand was modeled using a knowledge-worker density and flexible-membership penetration analysis approach over a 5 years horizon. The reconciliation tested whether incremental supply, including the subject, could be absorbed within the projection window without compromising stabilized occupancy assumptions.
Capture Rate Calibration
The subject's capture rate was calibrated against the absorption capacity of the PMA. The analysis concluded that PMA absorption capacity exceeded subject build-out by a factor of 1.6 across the projection window, with a stabilized capture rate of 2.4%.
Exhibit 1: Comparable Supply Set, Illinois PMA
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Exhibit 2: Demand Projection Summary, 5 years Horizon
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Exhibit 3: Subject Capture Rate vs. PMA Absorption Capacity
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Analytical Conclusions
- West Loop daytime knowledge-worker population stood at 32,400 within the drive-time PMA.
- Comparable coworking facilities operated at 78% to 86% desk utilization with $385 to $520 monthly memberships.
- Pre-leasing of 162 memberships at lender review confirmed early absorption.
- Year-three DSCR of 1.31x cleared the SBA 7(a) review threshold.
Deliverable
The delivered report ran 96 pages with 22 exhibits distributed across nine analytical sections, plus appendices documenting comparable supply data, demographic inputs, and financial projection assumptions. The document was prepared to the documentation standards of the specialty SBA lender. The corresponding SBA 7(a) review framework guided exhibit selection and supporting documentation.