What’s going on:
Demand for flexible office spaces has been on the rise, with meeting room bookings up 26% between 2021 and 2022, according to a report published by The Instant Group. The report also reveals that the average contract lengths in the flexible workspace sector have increased by 40% in 2023 when compared to pre-pandemic levels.
Several U.S. cities like New York, Chicago, Phoenix, Austin, and Houston reported increasing coworking space desk rates. The data revealed that Florida’s Miami-Dade and Broward counties are also among the fastest increases, according to South Florida Business Journal. The data reveals that desk rates in Miami-Dade increased by 6% while Broward saw an 8% increase.
Why it matters:
The customer base for coworking companies has grown significantly in recent years — stretching far beyond startups and freelancers to include larger, more established businesses. This trend has brought about an upsurge in contract lengths and occupier sizes across several U.S. cities.
How it’ll impact the future:
The rising demand for coworking spaces will likely continue to drive rental and desk rates upward, particularly in cities and areas where supply is outstripped by demand. This could lead to a sellers’ market, with existing coworking spaces under pressure to accommodate the growing number of businesses seeking flexible workspaces.
Traditional commercial office landlords might also need to adapt their offerings to compete with the increasing popularity of coworking spaces.