The growing popularity of coworking spaces is reshaping the U.S. office market as more professionals turn to flexible work environments.
Since the pandemic’s peak, coworking has filled the void between traditional in-office and remote work, offering flexibility and adaptability that many businesses and employees now seek.
According to the latest U.S. office market report by Commercial Edge, the number of coworking spaces nationwide grew by 25% year-over-year, reaching 7,814 locations by February 2025.
The total square footage of coworking spaces also rose 15.2% to 140.1 million square feet. As a result, coworking now makes up 2% of the total U.S. office space, marking a 30 basis point increase from the previous year.
Corporate occupiers are increasingly incorporating coworking into their real estate portfolios, taking advantage of flexible terms, sizes, and pricing.
The demand for flexible office spaces is expected to keep rising, as companies continue to embrace hybrid and remote work models.
The South leads the country in coworking locations, with regions like the Southeast and Southwest seeing year-over-year increases of 24.2% and 18.8%, respectively.
Despite the increase in coworking locations, the size of these spaces has decreased by an average of 1,524 square feet over the past year. The trend reflects a shift toward suburban locations, moving away from central business districts in favor of smaller, more affordable spaces.
Meanwhile, national office vacancies continue to rise, with the vacancy rate at 19.7% in February 2025, up 180 basis points from the previous year. This shift is also reflected in office listing rates, which increased by 5.7% year-over-year to an average of $33.41 per square foot.
Regional variations are notable, with San Francisco posting the highest vacancy rate at 27.8%, while Miami and Tampa enjoy some of the lowest rates in the nation, highlighting the divergence in demand across U.S. office markets.
As remote work and hybrid models persist, the office construction pipeline is expected to remain slow. With only 48.6 million square feet of office space currently under construction, office development is at a 10-year low.
