Co-working has long lived in the space between prophecy and doubt. Evangelists promised it would remake the office, while skeptics saw a fragile model built on short-term commitments and long-term risk. Now, with fresh data and a reshaped office market, the industry’s true trajectory is coming into focus—and it’s neither collapse nor takeover, but something far more consequential.

Growth is real, but its meaning is easy to misread. Flexible workspace is expanding quickly in both locations and square footage, signaling that demand has moved beyond experimentation. Yet its overall share of the office market remains small, raising a more important question than whether co-working will dominate: whether it will become influential enough to reshape how buildings are leased, financed, and repositioned.

What’s emerging is not the co-working model many expected. Corporate users are replacing freelancers, smaller footprints are spreading across more buildings, and distressed offices are becoming testing grounds for flexible space. The result is a quieter transformation—one that could redefine the role of co-working not as the future of the office, but as an essential part of its reinvention.

JLL said yesterday on its fourth-quarter earnings call that it closed out 2025 with a clear rebound in scale. Fourth-quarter revenue reached roughly $7.6 billion, up about 10 percent year over year in local currency, while full-year revenue climbed to around $26.1 billion, an 11 percent increase from 2024. The growth was driven largely by transactional businesses. Leasing and capital markets both accelerated as deal activity improved, helping push adjusted EBITDA and net income higher alongside the topline.

CEO Christian Ulbrich told investors the firm “achieved new highs across key top- and bottom-line performance metrics,” attributing the performance to “our multi-year strategy, strong execution and favorable underlying business trends.” Investment sales rose sharply in the quarter, and leasing posted broad gains across asset classes. One standout was data centers, where management said activity “more than doubled year-over-year,” reflecting continued capital flows into digital infrastructure. The firm also highlighted record operating and free cash flow for the year, underscoring that earnings translated into liquidity.

JLL’s stock jumped in early trading as markets digested the better-than-expected results, a rebound from the recent sell-off that hit commercial real estate services names during the broader AI scare trade. That sell-off reflected investor anxiety that automation could erode fee-based advisory and brokerage margins. JLL’s results suggest that, at least for now, strong fundamentals and diversified revenue streams matter more than fears about short-term AI disruption. Management pointed to strength in its “proprietary data and technology platform” as a competitive advantage rather than a threat, implying that firms that embrace AI may actually improve efficiency without erasing the relationship-driven nature of real-estate services.

New York City Mayor Zohran Mamdani has floated a nearly 10 percent property tax increase as part of a proposed $127 billion budget to close a roughly $5.4 billion deficit, framing it as a last resort if state lawmakers refuse to raise income or corporate taxes. The move would be the first across the board increase in more than two decades, affecting more than 3 million residential units and over 100,000 commercial properties. With spending elevated and revenue growth slowing, property taxes remain the most direct and reliable lever to balance the budget before the June deadline.

New York already carries one of the highest effective property tax burdens in the country, and a near 10 percent increase would quickly raise operating costs. Multifamily owners could try to offset the hit through rent increases where allowed, but office and retail landlords facing weak demand would have fewer options. Higher fixed costs could pressure asset values, reduce investor appetite, and make underwriting new acquisitions or refinancings more difficult.

The proposal also reflects a broader fiscal reality facing major cities. Slower office recovery, shifting sales tax patterns, and rising pension and service costs are creating persistent budget gaps, and property taxes remain one of the few revenue sources local governments fully control. A visible move by New York could normalize heavier reliance on property owners when state or federal support falls short, even if its unusually complex tax system and political dynamics make it a special case. For commercial real estate owners, the message extends beyond one city. In an era of tighter public finances, property taxes are likely to remain a primary and politically durable tool for closing budget shortfalls.

Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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