Numbers have surfaced showing that shared space is growing within the sector thanks to help from gig economy, new innovations in proptech, and corporations turning to flexible offices, as well as other factors. Yardi® Matrix has come out with a special report based on this sector of real estate, showing that there is 5.5 billion square feet of office space in the top 50 US markets.
The special report explains that coworking accounted for a third of office leases over the last 18 months. The top 50 markets have around 93.2 million square feet of space which represents 1.7% of total office space. Metropolitan areas account for the most shared spaces. Specifically, New York City neighborhoods Manhattan and Brooklyn with 3.9% and Miami, FL with 3.5%.
Manhattan, having 17.3 million square feet of space, is among the top metro areas for coworking, followed by Los Angeles, Washington D.C., Chicago and Boston. Manhattan also added 4.1 million square feet of flexible office space since the fourth quarter of 2018. Los Angeles added 2.7 square feet, San Francisco and Dalls with 1.2 million square feet each, and Atlanta and Miami with 1.1 million, each.
While tension around the coworking industry leader WeWork continues to swirl, the impression that the entire business model is at risk, according to the report:
"Most signs point to coworking as a growth industry that remains in the early stages of development. 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.
SOURCE Yardi Matrix
Edited by V. Haviland