A new report from flexible office search platform Upsuite has found that the U.S. and Canada lost 6% of their coworking spaces this year.
Of the 4,000 locations that Upsuite tracked in North America, 226 closed in the last year with Kansas City and Portland being hit the hardest.
While this may seem like a bad omen for what is to come of the coworking industry, Upsuite CEO Ben Wright says these numbers are still lower than other sectors hit hard by the pandemic, such as retail and hospitality.
“The operators see a light at the end of the tunnel,” said Wright. “They feel like if they can make it through this time, they’ll be really well-positioned post-pandemic.”
Urban areas experienced the bulk of closures, with operators that focused on suburban markets being much better off.
The slowdown of the industry actually began pre-pandemic around this time last year. Since then, operators have had massive layoffs, faced numerous lawsuits over unpaid rent and saw high vacancy rates.
However, a recent survey from Workthere finds that coworking providers are still optimistic about the future of the industry.
Even more, a report from Colliers anticipates that flexible workspaces could double or triple in the U.S. over the next five years as companies look for offices on a short-term basis.