Coworking Model Thrives Post-Pandemic

While coworking spaces became popular before COVID-19 rocked the world, they’ve become even more desirable in the aftermath of the pandemic.

The national coworking space stock reached a total location count of 5,612 in March, and many of the facilities have expanded beyond central business districts and into the suburbs, according to a recent report from Coworking Café. 

At 113.7 million square feet, coworking space accounts for 1.67% of total office space in the U.S. The amount of coworking space has grown dramatically since 2010 when JLL reported about 12 million square feet in flexible workspaces across the country.

In terms of cost to lease the space, the national median rate for open workspace was $134, while the price for a dedicated desk is $326. But some markets are more pricey than others. Manhattan and San Francisco — among the most in-demand business hubs — have rates that, in some instances, are twice as high.

Denver also recorded slightly higher prices, with open workspaces going to $160 and dedicated desks costing $340. Office vacancy rates in Denver spiked in January, a fact that the most recent Yardi Matrix National Office Report attributed to the rise in remote work. The U.S. Census Bureau’s American Community Survey reported that 28% of Denver’s active labor force works from homes — among the highest shares in the country.

Coastal markets like Manhattan, Los Angeles, Washington, D.C., Boston and Houston — which all have vibrant business scenes — have significant concentrations of coworking space.

As coworking rises in popularity, investors and landlords should be mindful of trends that are shaping the industry in 2023. Coworking has evolved from being just a space to being viewed as a service. Coworking-as-a-Service (CaaS) includes the space as well as other benefits users have come to expect, including 24-hour keycard access, mentorship building and access to venture capital, according to Coworker magazine.

Other perks to offer coworking communities include free parking, book clubs, local shop discounts and pet-friendly offices. And for many people, it’s important that a coworking operator have multiple locations throughout a city or across the country.

The operators with the most coworking spaces at the national level were industry behemoths Regus, WeWork, Industrias and Spaces.

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