Demand For Flex Offices Is Growing In Secondary Cities
The Instant Group’s U.S. Market Summary has found that the cost-per-desk for flexible workspaces is following two paths: prices are declining in gateway cities and increasing in secondary markets.
For example, the cost-per-desk in New York City’s Midtown Market declined by 29%, followed by Washington D.C.’s costs falling by 23% and Boston’s costs falling by 22%.
However, Phoenix’s cost-per-desk saw an increase of 39%, followed by a 14% increase in Nashville, and 11% in Denver.
The report highlights the fact that flexible workspaces are moving away from central cities and into smaller areas, such as the suburbs, where people live. In fact, demand for flexible office space fell by 14% in New York City last year, but rose in areas like Westchester, New York and Connecticut.
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Although this is good news for these secondary cities and suburbs, The Instant Group notes that the challenge will be whether these operators can meet demand and offer the same level of service that major city options provide.
Still, the cost advantages to both tenants and operators means that demand in these areas is expected to continue growing.
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