Coworking Spaces Surge Amid Changing Demand
The coworking industry is growing steadily, driven by increasing demand for flexible workspaces and changes in work patterns, according to the latest CoworkingCafe report.
As more companies adopt remote and hybrid models, coworking spaces are becoming more popular and easier to access, spreading across both downtown areas and suburban locations.
By the end of the third quarter of 2024, nationwide coworking sector inventory reached 7,538 spaces, accounting for a 7 percent increase quarter-over-quarter. Growth is largely driven by major metropolitan statistical areas. Of the 25 leading markets surveyed by CoworkingCafe, all but two—Bay Area and Salt Lake City—reported gains in coworking spaces.
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Notably, Nashville,Tenn., led with a significant 24 percent increase in coworking supply on a quarter-over-quarter basis, adding 22 new spaces to its total, while Indianapolis saw a 12 percent rise. Philadelphia came in third with a 9 percent increase, or 23 new spaces. On the other hand, Brooklyn was the only market to record a decrease, with its inventory shrinking by 3 percent, or by two spaces.
In the third quarter of 2024, Los Angeles, Dallas-Fort Worth and Manhattan retained their spots as the top three markets in the coworking industry, CoworkingCafe noted. Los Angeles leads with 292 spaces after adding 13, while Dallas-Fort Worth holds the second place with 279 after a 3 percent increase. Manhattan ranks third with 275 spots, adding 11 spaces.
Coworking space in the U.S. grew by 5 percent in the last quarter, adding nearly 5 million square feet and totaling 133.5 million as of October. Nashville led with a 13 percent increase and San Francisco followed with a 12 percent rise. However, five markets saw declines, including Brooklyn (-17 percent) and Manhattan (-6 percent). Austin (-4 percent), Denver (-3 percent) and Dallas-Fort Worth (-2 percent) also posted declines.
While the overall coworking square footage in the U.S. increased, the average size of individual spaces decreased by 2 percent to 17.7 million square feet, reflecting a trend toward smaller, community-focused environments. Manhattan (40,597 square feet), San Francisco (29,397 square feet) and Chicago (26,068 square feet) hosted the largest spaces.
Stable prices with regional variations
According to CoworkingCafe, coworking membership rates remained stable overall during the third quarter of the year, with only slight fluctuations in specific markets. Dedicated desks held steady at a national median of $300 per month, while virtual offices saw a modest $1 increase to $120. The price for open workspaces also rose by $1, reaching $150 per month.
Washington, D.C., remained the most affordable market for virtual offices, offering rates as low as $80 per month. Denver, Colo., and Brooklyn were the only markets with virtual office rates under $100, both priced at $99. Meanwhile, New Jersey and Chicago were the most expensive, commanding rates of $210 and $205, respectively. The largest price hikes last quarter were in Atlanta, up $32 to $179, and Chicago, rising $16 to $205 per month.
Indianapolis offers the most affordable dedicated desks at $209 per month, below the national median of $300. Other affordable markets include Raleigh-Durham, N.C., and Salt Lake City. In contrast, Manhattan charges $510, the highest rate. Price drops occurred in Manhattan and Atlanta, while L.A., D.C., and Boston saw slight price increases.
The coworking sector has also completed another step in its evolution, the report noted. As growth continues, existing brands are looking to reinforce their position and growth potential, by establishing partnerships. The recent announcement of VAST Coworking, an entity resulted from the association of Office Evolution, Venture X and Intelligent Office, is an illustration of that trend. The resulting venture now features 174 locations across the country, pointing to the emergence of coworking as a mainstay for the industry.
Read the full CoworkingCafe report.
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