Coworking Operator Management Agreements: The Complete 2026 Guide for Landlords and Tenants

The WeWork bankruptcy in 2023 was a turning point for the commercial real estate industry. Hundreds of landlords were left holding master leases with above-market rents and no creditworthy tenant in possession. The market's response was swift: by 2025, the dominant model for new coworking partnerships had shifted from the master lease structure to the management agreement (also called a GOM agreement, operating agreement, or Gross Operating Margin agreement).

Under a management agreement, the landlord retains all leasehold risk but also captures a larger share of upside when coworking demand is strong. The operator provides its brand, platform, technology, and management expertise—but no longer signs on the dotted line for a rent guarantee. For landlords, this eliminates the risk of catastrophic lease liability. For coworking members (end-user tenants), the implications are more complex—and largely unappreciated until something goes wrong.

This guide breaks down the management agreement structure from all three perspectives: landlord, operator, and end-user coworking member.

Master Lease vs. Management Agreement: The Core Distinction

GOM vs. Net Lease Revenue Structures

Gross Operating Margin (GOM) Structure

In a GOM structure, the landlord's payment is calculated as a percentage of the coworking operation's gross operating margin—revenue minus direct operating costs, before debt service and capital allocation.

Pure Revenue Share Structure

In a revenue share structure, the landlord receives a direct percentage of gross revenues without deducting operating costs. This is simpler to calculate but exposes the operator to a fixed cost burden even during low-occupancy periods—somewhat similar economically to a master lease.

Hybrid Structure: Base Plus Revenue Share

The most common 2025–2026 structure is a hybrid: a modest base payment (typically $15–25/SF/year, below market rate) plus a revenue or GOM share after the operator reaches a "breakeven" threshold. This gives the landlord a floor and upside participation while giving the operator a lower hurdle at below-market occupancy levels.

Key Management Agreement Terms

Operator Performance Standards

The management agreement must specify measurable performance standards that the operator must meet. Without these, the landlord has limited ability to terminate for poor performance. Standard metrics include:

• Minimum occupancy rate: typically 70–75% of sellable desks/offices over a rolling 12-month period
• Member retention rate: month-over-month churn rate cap (commonly 5–8%/month)
• Revenue per available desk (RevPAD): minimum RevPAD benchmarks by market
• Net Promoter Score (NPS): member satisfaction minimum
• Financial reporting: monthly P&L submission within 15 days of month-end

Operator Exclusivity and Non-Compete

Management agreements typically restrict the operator from operating competing coworking spaces within a defined radius (typically 0.5–2.0 miles) during the agreement term. Conversely, landlords often agree not to engage a competing operator in the same building during the operator's term.

Buildout and Capital Expenditure Obligations

Under management agreements, the capital investment dynamic reverses compared to master leases: the landlord typically funds the buildout (since the landlord retains ownership). The operator contributes its platform, branding, technology, and operational expertise. Key buildout provisions to negotiate:

• Initial buildout budget: who approves, who administers, what is includable
• Ongoing CapEx: refresh cycles (typically every 5–7 years), responsibility allocation
• Furniture and equipment ownership: typically landlord since they're funding it; important for step-in scenarios
• Technology infrastructure: Wi-Fi systems, AV equipment, access control—who owns on termination

Operator Insolvency Risks Under Management Agreements

The management agreement structure significantly reduces (but does not eliminate) the insolvency risk to landlords. However, coworking members face distinct risks in an operator insolvency scenario.

What Happens to the Operator's Platform

Modern coworking operations are heavily technology-dependent. When WeWork filed, members lost access to the app-based building access system, the community platform, and the venue booking system within weeks. Under a management agreement, the operator's technology platform is typically the operator's proprietary system—not owned by the landlord—meaning a technology disruption can make the space effectively unusable even if the landlord retains physical possession.

Management agreements must address:

• Software license transition: Can the landlord continue using the operator's platform during a transition period post-termination?
• Member data ownership: Who owns the CRM, member contact data, and billing relationships?
• Access control system: Is physical building access controlled by the operator's proprietary system, and what is the transition plan?
• Transition period: Minimum 60–90 day wind-down or transition notice before any system shutdown

Automatic Stay Risk in Bankruptcy

When an operator files for bankruptcy protection, the automatic stay prevents the landlord from terminating the management agreement without bankruptcy court approval. This can leave the landlord effectively locked into a non-performing management agreement for months while the bankruptcy process unfolds. Unlike a master lease rejection (which terminates the operator's obligations), a management agreement bankruptcy is more complex—the agreement may be an "executory contract" that the bankruptcy trustee must either assume or reject, with the landlord having limited ability to compel a decision.

Tenant and Member Protection Provisions

Recognition Agreements for Long-Term Members

Members signing 12+ month membership agreements in management agreement coworking spaces should request a recognition agreement from the landlord directly. A recognition agreement provides:

• Landlord acknowledgment of the member's membership agreement
• Commitment that the landlord will honor the membership terms if the operator is terminated
• Designation of a landlord contact for notices in the event of operator default
• Minimum notice period (90+ days) before any membership termination resulting from operator change

The Membership Agreement vs. License vs. Sublease Question

Coworking memberships are typically structured as licenses (not leases). A license grants the member the right to use non-exclusively designated space, without creating a landlord-tenant relationship. This has several legal implications:

• Members may not have commercial tenant protections (implied covenant of quiet enjoyment, notice requirements for removal) that would apply to a sublease
• Month-to-month termination rights are typically much broader than lease termination rights
• Some jurisdictions have begun extending tenant protection statutes to certain coworking arrangements—check local law

Step-In Rights: The Critical Continuity Protection

Step-in rights are the most important provision in a well-drafted management agreement from both a landlord and tenant protection perspective. A robust step-in rights provision should:

1. Define triggering events: Operator bankruptcy, insolvency, failure to meet performance minimums for 3+ consecutive months, failure to pay amounts owed to landlord, loss of regulatory approvals, key personnel abandonment
2. Specify the step-in process: Landlord designates a replacement operator or assumes direct management; operator must cooperate with transition; technology and data transfer obligations become immediately effective
3. Protect existing members: Replacement operator (or landlord directly) must honor existing membership agreements for their remaining term
4. Address staffing: Whether existing operator staff are offered transition employment
5. Define financial settlement: How unbilled operator compensation, security deposits, and pre-paid memberships are handled

SNDA in Management Agreement Structures

The SNDA (Subordination, Non-Disturbance, and Attornment) agreement serves a different but equally important function in management agreement coworking structures compared to traditional leases.

The Core Problem

In a traditional lease structure, the SNDA protects the tenant: if the landlord's lender forecloses, the tenant's lease survives. In a management agreement structure, the operator has no lease to survive foreclosure—it has only a management contract. And the members have only membership licenses with the operator—which reference no lease that might survive.

The result: in a foreclosure scenario under a management agreement structure with no SNDA-equivalent protections, members could find that:

• The foreclosing lender takes possession of the building
• The management agreement is terminated (it may be extinguished as an encumbrance on the title)
• The member's license agreement—being with the operator, not the landlord or lender—becomes unenforceable
• The member must vacate or sign new agreements at whatever terms the lender-owner offers

What to Negotiate

For significant long-term memberships (12+ months, dedicated offices or suites), coworking members should request:

• From the operator: Representation and warranty that a non-disturbance agreement is in place with the building lender
• From the landlord: Recognition agreement confirming the landlord's commitment to honor memberships through any operator transition
• From the building lender (if significant commitment): Non-disturbance agreement committing the lender to honor memberships through a foreclosure event

Negotiation Checklist: 12 Management Agreement Protections

• Confirm the legal structure: is the operator operating as a master lessee or as a management agreement agent?
• Request a copy of the underlying management agreement (or at minimum, a summary of key terms affecting members)
• Negotiate a recognition agreement directly with the building landlord for 12+ month membership commitments
• Request confirmation that building lender SNDA/non-disturbance protections cover coworking members
• Confirm that step-in rights require the successor operator or landlord to honor existing membership agreements
• Verify technology transition provisions—who controls building access systems if the operator is replaced
• Confirm member data ownership: your data (contact information, billing, preferences) should be portable
• Request at least 90 days' notice before any management agreement termination that affects your membership
• Understand membership agreement termination rights: when can the operator (or landlord after step-in) terminate your membership with less than 90 days notice?
• Confirm security deposit refund obligations survive management agreement termination
• Verify that any prepaid rent or prepaid membership fees are held in a segregated account and survive operator insolvency
• Include a relocation obligation: if the operator is terminated, the landlord must provide comparable alternative space or reimburse remaining prepaid amounts

This article is for informational purposes only and does not constitute legal advice. Consult a qualified commercial real estate attorney for advice specific to your situation.