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Instant Group Research Shows Flex Office Demand is Up 58%, with Miami Outpacing Other Cities

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Compared to pre-pandemic levels of demand, the flexible office market in the U.S. looks very different. Now, workers are migrating away from commercial business hubs like Chicago and New York City to cities where it’s easier to have a high quality of life, and their employers are allowing — and in some cases, are even encouraging — them to do so.

In a new study by The Instant Group, demand for flex workspace is up 58% in cities across the United States. While cities like Los Angeles were once at the forefront of this demand, new business hubs such as Houston and Tampa are beginning to outpace traditional urban hotspots.

According to the data, Miami is outpacing all other cities with demand skyrocketing by 143%. Though once considered the hub for technology startups and a flexible style of work, San Francisco actually saw the largest decline in demand, dropping 24% in one year. 

“As hybrid work cultures take shape and people are empowered to choose where they live and where they work, we see a real increase in demand in ‘lifestyle’ cities and away from California, which has struggled with high taxes, high cost of living, and high office costs,” said Joe Brady, CEO Americas, The Instant Group.

“This migration is shaking up U.S. business hubs like New York and Chicago, as secondary cities have their moment in the sun with flex enabling companies to test out new markets for expanding talent,” said Brady.

The increase in demand in Texas – in large part a reported result of companies leaving California – is driving increased demand for flex space across the state; demand in Austin grew by 2%, in Houston by 66%, and in Dallas by 32% when compared to pre-pandemic levels.

Similarly, Phoenix (+71%), Nashville (+2%) and Denver (+21%) have all seen demand for flex flourish in response to the growing number of companies relocating or expanding into these states.

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Houston, in particular, is a standout thanks to the fact that many leading technology companies are relocating their offices to the city. Demand for flex workspace from tech companies alone has increased 16%, while San Francisco has seen a 33% drop, as companies want to place themselves close to the leading giants in their sector. 

Houston has also seen some of the highest supply growth in the country since the beginning of 2020 (+6%), led by Common Desk who has expanded to six locations across the city.

Among all coworking operators, Industrious accounted for the largest growth share, opening 15% of all new flex locations since early 2021. However, supply is also diversifying, with 66% of new supply growth outside the top four largest operators.

To find out more about the flex office industry in the U.S., access The Instant Group’s U.S. Market Summary analysis here

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