The purpose of this study is to synthesize the widely used theories about co-creation from two main perspectives: co-creation as an innovation process and co-creation as a design process applied to the service concept design in the built environment context. The architecture, engineering, and construction (AEC) industry do not have much application of end-user-oriented service design in general, especially with intensive co-creation processes. To facilitate such a process, we are using a living lab environment as a laboratorial model of the real built environment, but with the opportunity to have access to the end-users and different types of stakeholders. Using the KTH Live-in-Lab explorative case study, we were able to discuss the concept of co-creation by distinguishing between co-creation as innovation and co-creation as a design process, facilitating the process of co-creation of service concepts for the proposed built environment including methods from both perspectives: innovation and design, and evaluating the process of service concepts co-creation for the built environment from the point of innovation, knowledge transfer, sustainability, and user experience.