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Workspace Market Stats: Space, Size and Pricing

Workspace Market Stats Coworking Data

Data from research and surveys helps businesses make informed decisions about their future steps. Coworking, a community and collaboration driven approach to office space, evolved from the traditional business center and flexible workspace concepts. After gaining steam and global interest over the past few years, the acquisition of data – stats on growth, space and pricing – has been a priority of critical stakeholders.

Since its early days as a niche market, there was little information available about coworking. With efforts from commercial real estate corporations to both regional and global industry associations, the amount of data available about coworking has improved. We’ve compiled data from the most significant research carried out on the coworking market and provided our appreciations. These stats speak to market size, growth and pricing, which earmark the trajectory thus far of the market, and its projection into the future.

Since mid-2014, shared office providers have leased more than 3.7 million square feet in leases of 20,000 square feet and largerClick To Tweet

The footprint of shared office space is increasing. As corporates eat up more flexible office space, joining small businesses and freelancers, the demand for coworking along with the square footage will continue to drive demand.

 

The U.S. coworking industry now totals 27 million square feet.Click To Tweet

The interest taken in shared workspaces by CRE companies, property owners, and asset managers has surfaced in the form of new square footage of coworking space. 26.9% of U.S. coworking spaces have resulted from organic growth, or workspaces newly entering the market.

 

The coworking industry makes up just 0.7 percent of the total U.S. office market. Click To Tweet

This is a surprisingly small percentage compared to the rapid growth of coworking in the past few years. As the demand for flexible office increases, new players enter the market, and existing operators expand, we can expect this percentage to increase.

 

Regus and WeWork account for nearly 80%(approximately 21 million square feet) of total leased space. Click To Tweet

It’s no surprise that Regus and WeWork represent such a large piece of the shared workspace pie in the US. Regus has been operational for almost 30 years, it has 2,300 locations in 106 countries and is the world’s largest provider of flexible workspace. WeWork’s $20 billion valuation makes it the fourth most valuable U.S. startup, following Uber, Airbnb, and SpaceX, and it is expanding globally at the speed of light. The vast size of these players may serve as obstacles to private, non-funded workspace providers, but they also educate the market on flexible office concepts and encourage them to differentiate their product offering to compete.

 

Rental rates for Class A CBD space nationwide in the US average $49.59 per square foot, while shared offices cost around $139 per square foot—a 181 percent premium.Click To Tweet

It may seem unreasonable for a company to opt for an overall more expensive office space. But after crunching the numbers, the 181% premium rate includes a host of services and amenities that would otherwise cost a small fortune for independent companies to provide to their employees. From events, workshops, collaboration opportunities, overhead and utilities to coffee and snacks, the overall space to rent from a coworking space is more economical than a traditional lease. For one, companies save the expense of an office or facilities manager. As new generations demand flexibility, there is no price tag for short-term, flexible leases that enable organizations to expand and contract as needed, especially when economic uncertainties become a reality.

 

30% of all commercial office space is projected to be consumed as “flexible space” by 2030. Click To Tweet

Coworking is on the rise, new players are entering the market, and as flexible becomes a consistent demand in the workforce, the amount of flexible space will slowly catch up to traditional office space, perhaps even equaling out in the coming decades.

 

The number of coworking spaces worldwide in 2017 was 13,800, up from 11,300 in 2016.Click To Tweet

In line with growth trends similar to previous years, the 22% increase in coworking spaces between 2016 and 2017 includes the expansion of existing providers as well as new market players. 2017 saw the aggressive global development of big brands like WeWork and Spaces, along with homegrown brands like Industrious and Serendipity Labs.

 

The number of global coworking spaces is forecasted to grow 14,411 in 2017 to just over 30,000 in 2022.Click To Tweet

Given the strength of the economy and commercial real estate market, we can anticipate the number of coworking spaces to continue to rise. Undoubtedly the most significant Coworking markets will continue to expand, along with secondary or suburban markets. Globally, we can anticipate China, Singapore, and Latin American markets to comprise a large percentage of the spaces that will almost double the market by 2022.

 

The number of coworking members is expected to grow from 1.74 million in 2017 to 5.1 million in 2022. Click To Tweet

Corporate coworking adoption, the rapid expansion of the shared workspace in Asian markets, and more freelancers and remote workers entering the workforce will almost triple the number of coworking members, driving greater demand.

 

Coworking spaces are 10-30% cheaper as compared to traditional office space.Click To Tweet

The lower cost of leasing a coworking space compared to leasing a traditional office is a driving factor in the expansion of the market. Coworking removes the overhead costs and responsibilities of managing a property while delivering other value-added services for startups, SMBs, and freelancers who are otherwise subjected to coffee shops or economic burden.

 

As of 2016, the UK flexible workspace sector was estimated to be worth £16bn (£19bn taking into account additional income from services supplied by operators). Click To Tweet

The UK has been a leader in the flexible workspace market and continues to be the largest with 1,136 centers. As large commercial real estate and investment companies join the market and providers expand amenities and services to differentiate their brand, we can expect this valuation to increase.

 

The number of coworking centers increased by more than 20% in Tokyo, Berlin, Singapore, New York City and Melbourne.Click To Tweet

The upsurge of coworking spaces in these cities is indicative of the worldwide expansion of the Coworking model. In particular, growth in Asian markets has brought new and rapidly expanding brands.

 

New York City boasts the most expensive market for a workstation, clocking in at an average of $1,100, closely followed by San Francisco, Chicago, Los Angeles, London and ParisClick To Tweet

New York City is the business capital of the world with the most expensive workstation rate trailed narrowly by the tech hub of the world, San Francisco. These two cities were home to the first coworking spaces known in the U.S. Both markets have grown tremendously since inception and continue to rise in number and cost of workstations.

 

The average amount of space per person is down to approximately 176 square feet per worker from 225 square feet.Click To Tweet

The days of the cubicle are over. While open space provides some challenges to productivity, the general trend is ebbing away from large dedicated spaces, and flowing towards spacious shared areas. Common areas filled with amenities and conducive to collaboration and community building are priorities for developers and in high demand among workspace providers.

 

80% of coworking spaces offer private offices, while 40% of Serviced Offices offer monthly, unlimited coworking. Click To Tweet

Coworking is not exclusively limited to open space. Throughout the years, providers classified as coworking spaces have realized that offering private space in their product portfolio is an assured revenue generator. Similarly, serviced office providers have begun to provide coworking to attract a broader market.

 

40% of all coworking spaces are profitableClick To Tweet

While the percentage of coworking spaces that lost money decreased, the profitability of the coworking model has been under the gun over the past few years. The volatility of the market, increased competition, and shifting product offerings often made it difficult for operators to turn a profit. However, it’s not impossible. As the market expands, it weaves out those operators that cannot compete with the likes of WeWork and Regus. And as it matures, the increase of dedicated workstations and private offices within coworking spaces contribute to their overall profitability.

 

Data is a sure way to gather accurate and reliable information on the market. Insight from these workspace market stats provides a view of the market that guides operators to grow and shift their business into the future. To safeguard your workspace from competition and keep up with market trends it is vital to focus on your business, Coworking community and operational efficiency. Consult our resources library for more information on running and growing your workspace in an expanding market.

Sources
JLL
Statistica
Emergent Research
Cushman & Wakefield
Capital Economics, LTD
Instant Offices
CoreNet Global
2017 GWA Industry Financial Survey
Deskmag
Comprehensive workspace platform that makes members happy.
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Amanda Fanoun

I'm the Queen of Content here at essensys. When I'm not writing enticing and educational workspace-related articles, I'm out and about with friends and family, trying new restaurants, traveling, keeping fit and planning my next adventure.

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