This document discusses how physical work environments can support agile teams. It finds that top-performing companies spend more time collaborating, learning, and socializing than average companies. These companies also view collaboration as more critical than focus work. The document also describes how coworking spaces foster sharing, openness, and co-creation through principles of authenticity, flexibility, and transparency. It provides examples of how agile teams at Nokia and Navteq benefited from being co-located, with improvements in communication, decision-making, and team cohesion. Lastly, it discusses challenges of collaboration versus focus, proximity versus privacy, and outlines a vision for the future of work spaces.