Segment tops 93 million square feet in U.S.; suburban markets present new opportunities
SANTA BARBARA, Calif., Nov. 8, 2019 – Shared space is on the rise, driven by the gig economy, burgeoning technology-sector employment, corporations seeking lease flexibility and other factors. This segment is the subject of a new Yardi® Matrix special report based on leases for 5.5 billion square feet of office space in the top 50 U.S. markets.
The report shows that coworking accounted for one-third of office leases over the last 18 months. The top 50 markets contain 93.2 million square feet of space, representing 1.7% of total office space. The metros having the most shared space as a percentage of stock are New York City boroughs Manhattan and Brooklyn with 3.9% and 3.7%, respectively; Miami is close behind with 3.5%.
Manhattan, with 17.3 million square feet, is the top metro for coworking space, followed by Los Angeles, Washington, D.C., Chicago and Boston. Manhattan has added 4.1 million square feet of working space since the fourth quarter of 2018, followed by Los Angeles (2.7 million square feet), San Francisco and Dallas (1.2 million square feet each), and Atlanta and Miami (1.1 million square feet each).
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, noting that the practice “is expanding especially rapidly within large markets [and] is also gaining steam in the suburbs. As the industry matures, we expect that coworking will rise in suburban office markets.” New business models, such as establishing coworking properties in shopping malls and other non-traditional settings, are emerging as well.
Get up to date on this dynamic industry with the Yardi Matrix special report, titled “Shared Space: Coworking’s Rapid Growth Set to be Tested.”
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