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Manhattan’s coworking market contracted for the first time ever, losing 400,000 square feet of space between the first and second quarters of 2025, according to data from CoworkingCafe. The city saw a reduction of 13 coworking locations, bringing the total to 267 spaces covering 10.9 million square feet, down from 11.3 million square feet earlier this year.
Meanwhile, Chicago (the nation’s second-largest coworking market), experienced a slight increase in inventory, reaching 8.2 million square feet in Q2.
The report attributes Manhattan’s decline to market oversaturation and rising operational expenses, which have caused major operators to reconsider their portfolios and terminate non-essential leases, according to BisNow.
This is notable given WeWork’s recent activity in the city, where the company has been signing new leases totaling over 100,000 square feet across two major sites. However, WeWork’s bankruptcy restructuring led to the rejection of more than 100 locations and renegotiation of many others with shorter lease terms and early exit options.Â
Although WeWork has been closing numerous Manhattan locations, competitors have absorbed many of these spaces, allowing the city’s coworking market to grow until this recent downturn.
Despite slowing in Manhattan, WeWork added two locations in key U.S. markets during the second quarter, increasing its total to 150 locations. However, rival companies expanded more rapidly. Regus increased its footprint by nearly 50 new locations, HQ (part of International Workplace Group) added 23, and CBRE’s Industrious grew by five.
Regus’s expansion reflects a strong strategy focused on strengthening its position in major cities and entering promising secondary markets.
Nationally, coworking spaces saw a decline in total locations for the first time since the pandemic, dropping from 7,840 to 7,742 sites. However, the average size of coworking spaces grew, pushing the overall U.S. coworking footprint to 141.3 million square feet, up from 140.8 million in the previous quarter and 137 million at the end of 2024.
