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Two key trends are dominating the US flexible workspace market,
according to the Annual US Market Summary report by The Instant Group. Recent findings show indie operators far outweigh industry giants, owning 93% of the US flexible workspace market despite large operators controlling more than a third (34%) of the US market.
This differs from more mature flexible space markets like the UK, France, and Germany, where larger operators dominate. The US market for co-working and flex space showed sensational growth in 2017 as the move towards more agile working gained pace.
With an estimated 80 million square feet of flexible space in the US compared to around 60 million square feet in the UK, the country remains the largest market for flexible workspace in the world:
· 51% of the total number of flexible workspace centers are located in five states – San Francisco, Los Angeles, New York, Houston and Dallas.
· The average desk rate across the US is $969, which is up from $934 the previous year.
· The fastest growing flexible workspace markets in the US are in New York,California and Texas.
Colorado and Massachusetts are the most expensive states for flexible workspace, with average monthly desk rates of $1,250 and $1,213 respectively. Due to the distribution of additional centers across the state, New York desk costs have seen a slight decrease at $1,063.
On a city level, Boston is the most expensive, with an average monthly desk rate of $1,889 and 15% growth. San Jose has seen a 14% increase in desk rate pricing, with the average now being $908 per desk.
Michelle Bodick, Managing Director of Sales and Marketing for Americas at The Instant Group explained,
“There is much more expansion to come across the US particularly in those cities outside the more established markets of NYC, LA and San Francisco. We strongly anticipate flex space growing proportionately as part of the CRE mix across the country,”
“Users of flexible space are becoming increasingly familiar with shared office solutions and, as time moves on, the barriers between offices are starting to break down. In part this has been enabled by technology which offers better security around cloud and wireless communications, but it is also a social phenomenon in which exposure to other ways of working and other corporate cultures is increasing workers’ ease in this environment.”
“As the US continues to embrace the flexible workspace market, operators are diversifying the types of space on offer, driving the nichification trend and providing spaces that cater to very specific audiences and interests.”
The US Market Summary report delves deeper into the growth of niche operators, how supply is changing across key cities, and whether 2030 may see average office lease terms decrease to just one year.