WeWork IPO will test level of 'consensual hallucination' in market

The proliferation of coworking spaces in New York City and other urban hubs belies any perception of near-term risk. Andrew Simon, a longtime New York broker at Helmsley Spear, said he continues to broker coworking deals in both older and newer buildings around the city. Once a coworking skeptic himself, he said many of the major players in New York's legacy office market have warmed to the business model over the last couple of years.

"I think many of the brokers of my ilk — I've been doing this for quite a few years — were skeptical as to the depth of this type of market. ... There's a lot of these [coworking] groups now and they are a significant portion of the market," he said.

Simon said the risks associated with the coworking business model have diminished to a degree as it has reached critical mass in the city, but he remains cautious about its long-term future, and he worries about its health in a recession.

"This hasn't been tested yet in a down market," he said.