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Coworking in the CBD: Which Business Districts Have the Highest Adoption of Flex Workspaces?

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Highlights:

  • New York City had 180 coworking spaces in CBD locations divided between Midtown Manhattan and the Financial District.
  • 50% of all U.S. downtown coworking spaces were concentrated in five major cities.
  • More than two-thirds of coworking spaces in Oakland Washington, D.C., Philadelphia, and Chicago were concentrated in downtown areas.
  • Despite having more than 80% of their inventories outside of their CBDs, Denver — as well as the Texas hubs of Houston, Austin and Dallas — made the top 20 for their downtown coworking spaces.
  • Atlanta was the third-largest coworking market by coworking location count, but only 6% of these were in downtown areas.

As the popularity of remote work continues to soar, coworking spaces have become an important alternative for not only gig-economy workers, but also for large enterprise clients looking to diversify their office use.

Of course, coworking spaces are well-suited for various urban and suburban settings, but they’re especially effective in replacing traditional office space in central business districts (CBDs).

In fact, coworking spaces are highly sought-after in the commercial and economic hubs of our largest cities. That’s because limited space in prime locations often results in many ambitious startups and small- to medium-sized businesses being priced out of traditional office buildings. 

For this reason, a recent study by CoworkingCafe ranked the top 20 U.S. cities with the highest concentrations of flexible office spaces in their core business sectors. Below, we dissect the data and delve deeper into the distribution of flexible workspaces within some of the nation’s most significant coworking markets.

Mapping the Most Significant CBDs for Coworking in the U.S.

While some cities have been early adopters of flexible office spaces in their CBDs, others are still catching up. Thus, the top 20 cities by downtown coworking options are spread throughout the country, with higher concentrations in the Northeast and West Coast regions. As you might expect, the top five cities were major office markets with large populations.

Specifically, the majority of the significant CBDs for coworking were located on the East Coast, anchored by eight cities boasting more than 300 coworking spaces in total. 

However, the West Coast was also well-represented in the top 20, with the business districts of four California cities and Seattle totaling 83 downtown flex office locations. Texas also fared well in the ranking with three cities on the leaderboard contributing 42 coworking spaces in their CBDs. Meanwhile, Chicago was the only city representing the Midwest. It earned second place in the ranking with 71 coworking spaces in its business district.

Top 5 U.S. Cities Claim 50%+ of All CBD Coworking Spaces

New York City had the most coworking spaces with 180 coworking locations concentrated in Midtown Manhattan and the Financial District. More precisely, these areas accounted for 53% of all flexible offices within the five boroughs.

Of course, Manhattan’s business districts are notorious for their limited office space, making it difficult for startups and companies with limited budgets to afford traditional, long-term leases. What’s more, even large enterprises are leaning toward flexible solutions lately, making the conditions ideal for coworking. 

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Next, as the third-largest city in the U.S., Chicago is a major business hub with a thriving tech industry that’s home to many businesses, startups and freelancers looking for flexible office space.

Accordingly, the Windy City claimed the second-place spot with 71 flexible office locations within the Loop and River North. Therefore, two out of three Chicago coworking spaces were concentrated in the CBD. 

The nation’s capital followed with 55 coworking spaces, 74% of which were located in the CBD. These were mostly downtown, but also extended into Penn Quarter, as well as a handful in the East End.

Here, the high concentration of government agencies, non-governmental organizations and advocacy groups in the central areas of the nation’s capital explain the high density of coworking options in the CBD. 

Across the country, the Los Angeles coworking space inventory was significantly larger than that of Washington, D.C. with 94 locations. Yet, LA recorded only 24 flexible offices in its central business district, most of which were in the Financial District and Bunker Hill. 

Not to be outdone, Philadelphia rounded out the top five with 28 downtown coworking spaces, which made for an impressive 68% of the local inventory.

Off the Beaten Path: Cities Where Coworking Spaces Avoid CBDs

While most office spaces flock to central, well-connected areas, coworking spaces often take a different approach due to their emphasis on flexibility. Consequently, this has led to unique development patterns in some cities. Atlanta was a prime example of this, with only 6% of its 109 coworking spaces located in the CBD. Instead, there was a concentration of coworking spaces further north of the city center (from Tech Square through Midtown Atlanta), as well as in the traditional office hubs of Perimeter Center, Cumberland and Buckhead.

At the same time, Las Vegas coworking spaces, Charlotte and Houston all tied for second place in this ranking with only 10% of their coworking inventories located in their CBDs. In particular, Las Vegas stood out for its even distribution of coworking spaces throughout urban and suburban neighborhoods.

Likewise, Charlotte’s coworking spaces were mostly consolidated around downtown, with only four in the Center City CBD. And, although Houston had just 15 coworking offices in its downtown area, it nevertheless earned the eighth spot in the overall ranking.

Finally, Indianapolis took third place for the least downtown-focused coworking market with only 15% of its inventory located in the Mile Square area. While there was a significant cluster of coworking spaces in the wider downtown area, most of the city’s flexible workspace inventory was scattered along the beltway, particularly near the Keystone at the Crossing and College Park areas.

To conduct this study, CoworkingCafe collected data on coworking spaces that were completed and open to the public as of March 1, 2023, and only analyzed cities with three or more coworking spaces in their central business districts. The CBDs were defined by Yardi Matrix Real Estate Intelligence Source and traced by local real estate professionals. For a more detailed explanation of the methodology, check out the full report on CoworkingCafe.

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