The fundamentals of choosing a suitable location for a participatory workshop differ little from any other workshop. In essence all you need is a comfortable, well lit, appropriately heated/cooled room with sufficient space for the number of delegates you are inviting.
It’s difficult to have too much space for a participatory workshop. Space to all sit round the same table, or in a circle without chairs, space for small groups to work around a piece of flip chart, space for people to physically move around and arrange themselves into groups may all form part of the same single workshop, so never underestimate the optimum room size.
That said, if circumstances dictate otherwise, there is no reason why these exercises cannot be run in much smaller surroundings.
Why not try somewhere different, perhaps even somewhere ‘off campus’? Not only can this help prevent people popping back to their office during every break (or even between them), but the sheer fact of being somewhere ‘different’ can help create a welcome bit of distance between your session and daily concerns of the workplace.
This needn’t necessarily cost much money. Many institutions have arrangements with other local organisations which may provide access to potential venues.