The Yardi Matrix Coworking Report released last October discussed how the coworking industry’s massive growth will be tested in the coming years.
The study reviewed the leases of 5.5 billion square feet of office space in the top 50 markets in the U.S.
According to a study of Yardi Matrix’s office database, the top 50 markets made up 93.2 million square feet of coworking space as of September 2019, or 1.7% of total office space.
The market’s steady growth can be attributed to the constant evolution in office market trends, such as the rise of the gig economy, employment growth in the tech sector, corporations shifting to flexible lease models and workers demanding office environments with more amenities and a sense of community.
Additionally, the report reveals that urban environments have an edge over suburban areas as there is typically a higher concentration of workers in the technology sectors and public transportation.
“Manhattan, San Francisco, Seattle and Boston — among the leaders in coworking as a percentage of stock — all have office vacancy rates below 10.0%, well below the 13.5% national average,” the report read. “Meanwhile, metros such as Houston, Dallas and New Jersey—which have vacancy rates of at least 18.5% —have a much smaller percentage of coworking space.”
As far as major competitors goes, WeWork and Regus still dominate the market with 44.5 million square feet of leases. Despite WeWork’s recent issues, the report finds that corporations and small users will still continue to demand flexible office space.