Flexible office demand is up 13 percent in the first half of 2024 when compared with the first half of 2023, yet some markets, such as Austin, Boston and Los Angeles, have seen a decrease in demand, according to The Instant Group’s newly released U.S. State of the Flexible Workspace Market Report. In many markets, desk rates remain below 2023 levels when comparing the same time periods.
The U.S. national average price-per-desk for flexible workspace was $459 for the first half of 2024, up marginally from $455 in the first half of 2023. According to Instant’s recent Fixed to Flex partner survey, a striking 78 percent of operators plan to increase their rates over the next year, largely in response to rising operational costs, such as inflation, maintenance, and staffing.
The U.S. State of the Flexible Workspace Market Report identified pockets of opportunity for flex space in markets such as Miami and Boston, where supply is growing slower than demand.
“These are areas ripe for investment, because we know the demand is there, but supply is lagging,” said Ben Wright, Global Head of Partnerships, The Instant Group. “They offer landlords and operators of flex space a starting point to find their next location for expansion. This view combined with more granular data on how a space or building performs as flex helps investors de-risk their investment decisions.”
Of all cities analyzed, Miami achieved the highest demand growth, boasting a six-year compound annual growth rate (CAGR) of 20 percent. Washington, D.C. has seen steady growth throughout 2024, fueled by increased demand for offices with 20+ desks, although this has not yet solidified as a long-term trend.
While New York City and San Francisco are still experiencing lower demand compared to pre-pandemic levels, both have seen recovery over the past years, suggesting a growth cycle is underway.
Demand for Flex by Square Footage
The Price of Flexibility (2024 Growth Compared to 2023)
Supply and demand growth (based on three-year CAGR)
In-Demand Spaces and Amenities
Large companies more often utilize flexible workspace in its varied forms. The research shows that requirements for 26 or more desks make up almost a third (30 percent) of desk inquiries. Meeting room searches have increased 75 percent over the past year, and 73 percent of operators expect an increase in event space usage over the next two years.
The top searched-for amenity on InstantOffices.com is 24-hour access, up to 24 percent this year from 17 percent in 2023. Interest in sustainability has also increased, with traffic to the InstantOffices.com platform for sustainability certified centers up 94 percent from the first half of 2023 to the first half of 2024.
“More and more corporate occupiers are seeing the value of flexible workspace as a go-to real estate solution. Flex is not just coworking – it’s a diversified product offering that unlocks access to everything from desks and meeting rooms to private offices and managed office space – and it’s here to stay,” added Wright. “People are settling into dynamic types of workspaces that enable them to decide when and where they do their best work. In response to the increased demand for amenities such as 24-hour access and in anticipation of increased usage of a wider range of these flex products, operators are investing in expanding and innovating their product offerings.”
Methodology
Data within the report is compiled via The Instant Group’s leading flexible workspace platform. Data and insights from this report are compiled from The Instant Group’s proprietary flexible industry database, which tracks supply, demand, and transactional data.
About The Instant Group: The Instant Group has been rethinking workspace since 1999 with over 600 experts working globally across more than 175 countries. Instant’s digital platforms constitute the world’s largest digital marketplace for flexible workspace listing meeting rooms, virtual offices, flexible office space and coworking memberships. Its global team advises on commercial real estate solutions from serviced offices to fully customized managed offices, and consulting services for portfolio and net zero strategies.
Instant’s approach enables agility, hybrid working solutions and improved operational resilience for more than 250,000 businesses every year. Clients include Prudential, Booking.com, Shell, Jaguar Land Rover, and GSK. Instant has global offices including London, Paris, New York, Hong Kong, Singapore, India, Mexico City, and Sydney. www.theinstantgroup.com
