WeWork in South Lake Union is part of the 1 million square feet of coworking space located in Seattle.
SEATTLE—Despite coworking inventory growth, coworking still accounts for only 1%—47.8 million square feet—of the total 5 billion square feet of office inventory across the 87 markets tracked by Cushman & Wakefield. The firm's coworking and flexible office space report examines coworking and flexible-office trends, and the implication for the commercial real estate industry and its participants.
“Based on current near-term projections, coworking space could easily triple from its current share in gateway markets over the next decade,” said Revathi Greenwood, Cushman & Wakefield head of Americas Research and the report's lead author. “Total inventory could increase to over 5% of office space in many urban markets and as high as 10% in some markets.”
Manhattan coworking space accounts for less than 3% of office space. The other gateway markets are in a similar range with somewhere between 1% and 3% of office inventory in coworking space. Approximately half of all coworking inventory is in the six gateway markets of Manhattan, Los Angeles, San Francisco, Chicago, Washington, DC and Boston.
Non-gateway markets such as Seattle have more than 1 million square feet of coworking space. Others in that category include Atlanta, Dallas/Fort Worth, Denver and San Diego.
This growth is bolstered both by structural changes in the workforce and a changing profile of coworking users. Job growth in office-using industries—information, financial activities, and professional and business services—is also increasingly driven by small businesses. In 2017, small firms accounted for 89% of new job growth, up from 69% in 2000.
At the other end of the spectrum, coworking and flexible spaces are increasingly attractive to enterprise users, and providers are taking notice, actively promoting locations and services to large occupiers. According to Emergent Research, the percentage of WeWork members who work for companies with more than 100 employees quadrupled from 2010 to 2017. They now account for 12% of members. During the same period, freelancers/independent workers' share of memberships decreased from 68% to 39%. This matches the trend in the broader industry in which freelancers have moved from 55% of all memberships in 2012 down to only 41% in 2017.
“Occupiers' demand for flexibility is not going anywhere,” said David C. Smith, Cushman & Wakefield vice president and head of Americas occupier research, and co-author of the report. “The largest coworking providers continue to expand their portfolios at a dramatic pace.”
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
