Shared Space Moving Up

By on Nov 7, 2019 in Coworking, News

The coworking industry is growing rapidly, encompassing 93.2 million square feet in the top 50 U.S. office markets and making inroads in suburban spaces as well.

A new special report from Yardi Matrix portrays a practice that thrives in cities with large technology sectors and in markets with office vacancy rates significantly below the 13.5% national average, including Manhattan, N.Y., San Francisco, Seattle and Boston. Areas with vacancy rates in the high teens, among them Houston and Dallas, have much less coworking space as a percentage of total stock.

While 47% of coworking space is concentrated in just six traditional primary commercial real estate markets—New York City, Los Angeles, Washington, D.C., Chicago, Boston and San Francisco—“we expect that coworking will rise in suburban office markets” as the industry matures, the report says. These areas tend to draw clients from home-based workers who want an office for work and socializing purposes and from large corporations that establish small satellite offices.

While highly visible turmoil surrounding industry leader WeWork fosters the impression that the entire business model is at risk, “most signs point to coworking as a growth industry that remains in the early stages of development,” the report says. New business models, such as establishing coworking properties in shopping malls and other non-traditional settings, are emerging as well.

Get up to speed on all of this dynamic segment’s moving parts, prospects for further growth and risk factors in the new Yardi Matrix special report,  “Shared Space: Coworking’s Rapid Growth Set to be Tested.”