A new report from CBRE shows that Houston’s coworking market is having a moment despite the industry seeking growing vacancy rates and weak demand.
In fact, Houston was found to be the biggest metro in the U.S. to see an increase in coworking and flexible office space.
The report, which analyzed flexible office supply in 49 North American markets between the fourth quarter of 2020 and third quarter of 2021, saw Houston’s net supply grow by 5.3%, making it one of the rare regions that actually saw an uptick in space.
Due to the pandemic, most flexible office operators in major cities were forced to relinquish space to landlords. This led to the industry decreasing its total footprint in the country by 12.2 million square feet.
However, Houston added 153,000 square feet during the period that was analyzed, bringing its total supply to 3.1 million square feet.
Much of this accelerated supply came from the expansion of coworking operator Common Desk, which accounted for 84% of new space during this time period. Last month, the Dallas-based firm was acquired by WeWork and has been rapidly growing its footprint since 2020.
According to CBRE brokers, this spike in flexible office supply is also helping landlords accommodate new demand from tenants who are looking for flexible lease options, rather than signing long-term leases.
“Flex space has become a skeleton key that companies can use to address their changing office needs,” said Julie Whelan, Global Head of Occupier Research at CBRE. “They can use it to adjust their office portfolio as they figure out how hybrid work will affect their employees’ office-use patterns.”