Among the doom and gloom of the current national office market, there is a light.
Despite vacancy rates remaining higher than pre-pandemic levels and shifting tenant sentiment, one sector of the real estate office industry is thriving: coworking.
According to this year’s JLL The Future of Work Survey, 43% of real estate decision-makers expect to grow their flexible office expansion in the next three years. Experts believe that growing this growing flexible office footprint could keep office vacancies at bay.
“The shift that we’ve seen post-Covid has been a shift towards flexibility,” said Errol Williams, Senior Vice President at WeWork. “What we are seeing and hearing more and more is that companies are increasing the share of flexible real estate that’s in their overall real estate portfolio strategy.”
For WeWork in particular, the once-disgraced coworking operator cleaning up its act helped catapult its occupancy to 72% during the second quarter of the year. For its WeWork On Demand offering, bookings grew 62% year-over-year.
WeWork isn’t the only player having a moment, either. Other competitors like Industrious, which remained among the most consistent coworking companies throughout the pandemic, are continuing on an upward trajectory.
In fact, CEO Jamie Hodari said the firm’s footprint grew by 60% over the last year as more and more companies seek alternative workspace solutions for their employees.
Industrious has taken a variety of approaches to address growing demand, such as expanding into residential buildings and recently acquiring two flexible workplace providers in Asia and Europe to grow its international presence.
“So much of what’s going on right now is that the actual ways people want to work and the actual workplace strategies the companies are trying to deploy borderline require a flex partner to pull off,” said Hodari. “It’s not just that people are scared of long-term leases.”