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New Report Shows Growth in U.S. Coworking Space Count and Declining Prices

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Coworking is still expanding and changing across the country as remote and hybrid work continues to prove quite popular with both employers and employees. In light of this, CoworkingCafe analyzed the coworking scene in the 25 largest U.S. markets using exclusive data from the fourth quarter of 2023 to gain a deeper knowledge of the sector’s historical development and present condition.

At the same time, the CoworkingCafe analysts examined national prices, the total coworking inventory, the square footage covered by it, and the top operators presently operating in the market. They then compared the latest data with the industry’s status in Q3 of 2023.

Here are the main findings:

New Jersey Sees Highest Growth in Coworking Spaces as National Supply Continues to Expand

By the end of 2023, there were 6,251 flex workplaces in the country’s coworking inventory, which was a 1.28% rise compared to the previous three months. (In Q3, there were 6,172 spots available overall.) Although the quarter-over-quarter (Q-o-Q) gain was not major, it does indicate that the coworking market is stabilizing. More important, though, the coworking inventory increased in the vast majority of the top 25 markets during Q4 of 2023. The most notable was seen in New Jersey, where 13 additional coworking spaces were opened in a single quarter, representing a 9% rise since the end of Q3.

A graphic showing coworking supply in the 25 largest U.S. markets.

Remarkably, just one-fifth of the top 25 areas had minor declines in coworking inventory in the last three months of 2023. Moreover, even the most substantial of these drops — in Washington, D.C.; Seattle; and Minneapolis-St. Paul — occurred at a mere 2% decrease. Currently, there are 247, 123, and 85 coworking spaces in each of these markets, respectively.

At the same time, Chicago had a very minor reduction of 0.4% (now logging 229) after just one coworking space closed in the course of three months, while Manhattan lost three coworking spaces (from its previous 270) in Q4 for a 1% fall in the supply of coworking spaces.

Rates for Virtual Offices & Dedicated Desks Drop in Q4 While Open Workspace Rates Stay Stable

In terms of cost, the national median fee for virtual offices at the end of Q4 was $119 — a marginal decrease from $125 at the end of Q3. Washington, D.C. once again had the lowest median price of the 25 top cities, coming in at only $80 — exactly the same as it did in 2023’s second and third quarters. In the same vein, the virtual office marketplaces in Denver; Miami; Orange County, CA; and Brooklyn, NY, were all below the $100 threshold, as well.

On the other hand, Chicago and New Jersey had virtual office rates that were substantially higher than the $205 national median rate.

In the meantime, the national median price for open workspaces stood at exactly $149 per month in Q4, which was the same as in Q3. Even so, the cost of this kind of coworking subscription varied greatly in certain markets: Manhattan charged $225, while other well-known areas — such as San Francisco and Washington, D.C. — charged $200.

On the other hand, Phoenix and Orange County, California, ranked lower than the national median fee for open workspaces at a more reasonable $119, which remained unchanged from the previous quarter.

It’s interesting to note that the national median price of dedicated desks decreased from $329 in Q3 to $322 at the end of Q4. Nevertheless, dedicated workstations in Salt Lake City and Chicago were just $269, which was less than the national standard. Not far behind, the Dallas-Fort Worth metro had the second-cheapest rate in this category at $271.

Manhattan’s rate of $520 was, as predicted, still much higher than the national average. Likewise, dedicated desks were also more costly nearby in Brooklyn, with a median price of $455, whereas San Francisco registered $442 for the same kind of coworking membership.

Los Angeles Overtakes Manhattan, Now Leading with the Most Coworking Spaces

Los Angeles has overtaken Manhattan for the first time in months, albeit by exactly one space: in Q4, the city’s coworking inventory added one more space to bring the total to 268 spaces, while Manhattan saw a slight 1% decrease in flex workspaces, going from 270 to 267. For context, in Q3, Los Angeles trailed Manhattan by three coworking spaces.

A graphic showing coworking supply in the 25 largest U.S. markets.

Other than that, the total number of coworking spaces increased in New Jersey, Brooklyn, and Austin by 9%, 7% and 6%, respectively — the largest gains among the top 25 markets. In particular, New Jersey’s market ranked 10th nationally in Q4 as its inventory increased from 137 spaces at the end of Q3 to 150 at the end of Q4.

Related  2021 Coworking Industry Review

Next, after ranking fourth in terms of coworking supply the previous quarter, Dallas-Fort Worth overtook Washington, D.C. in Q4, now taking the third spot, with a 3% increase in inventory, while the country’s capital had a 2% decline in total space count. As a result, DFW currently claims 249 coworking spaces, compared to 247 in D.C.

In Q4, Philadelphia & New Jersey Acquired the Most Coworking Square Footage, with an 11% Growth

In the final quarter of 2023, the coworking industry seemed to have steadied, despite a minor decline in total square footage nationwide in Q3. In particular, the amount of space nationwide allotted to flexible workspaces climbed to 120.8 million square feet in Q4 from 117.7 million square feet for a 3% rise.

Philadelphia and New Jersey saw the largest increases in square footage, even though almost all of the top markets expanded their coworking footprints in Q4. In fact, there was an 11% rise in the total area covered by coworking spaces in both of these markets bringing the total to 2.5 million square feet in Philadelphia and 2.4 million in New Jersey. Not to be outdone, Fort Lauderdale recorded a noteworthy 7% gain in square footage in Q4 and returned to the top 25 markets after Indianapolis previously overtook it. As a result, with a sizable 1.3 million square feet of coworking space, the Fort Lauderdale market ranked 25th in Q4.

Further north, Brooklyn’s square footage grew by 7%, as well, to surpass the 2.3-million threshold. Other markets with significant increases in coworking spaces were Nashville (5%), and Miami (6% Q-o-Q).

While Average Square Footage Rises in the Majority of Markets, It Decreases by 5% in Austin

Interestingly, only two markets witnessed a reduction in the total amount of coworking space, while the average square footage of seven of the top 25 markets decreased. This indicates that smaller coworking spaces are becoming more and more popular. That said, the majority of these markets experienced only slight fluctuations.

For example, Manhattan, San Francisco and Salt Lake City saw -0.3% changes; Houston saw -0.1%; and San Diego saw -2%. In Q4, Raleigh-Durham’s average square footage decreased by 3%, as well. However, all of these markets were still above the national average of 19,331 average square feet, with the exception of San Diego.

A graphic showing coworking supply in the 25 largest U.S. markets.

What’s more, Manhattan maintained its top spot in terms of the average area of coworking spaces with an astounding 47,000 square feet — more than double the national average. San Francisco and Brooklyn, NY, trailed it from a distance.

In Q4 of 2023, Austin, TX, experienced a 5% decline in average square footage due to its coworking inventory, falling from 23,000 square feet to slightly less than 22,000, despite very slight changes in the overall square footage. Further evidence that Austin’s coworking scene is shifting toward smaller spaces comes from the addition of four new locations in the final three months of the year. Consequently, the market dropped two spots in this category (from ninth to 11th), just behind the Bay Area and Seattle.

In Just Three Months, HQ Doubled Its Inventory and Joined Top Operators

Industry leaders Regus, WeWork, Industrious, and Spaces maintained their top rankings in Q4 by logging the greatest numbers of coworking spaces across the country and in the top 25 markets. But, this quarter, HQ overtook Premier Workspaces — which was previously the nation’s fifth-most popular operator in Q1, Q2 and Q3 of 2023.

A graphic showing coworking supply in the 25 largest U.S. markets.

Within three months, HQ’s portfolio experienced remarkable expansion after doubling its supply of coworking spaces nationwide and expanding by more than 200% in the top 25 markets. Currently, the operator claims 167 locations throughout the United States, 78 of which are found in top markets.

Next, Regus was able to maintain its top spot by growing by 2% overall and 1% in the top markets. Meanwhile, throughout the 25 markets, Industrious and Spaces kept the same inventory, but Industrious increased by 1% nationally while Spaces fell by 1%. Lastly, WeWork’s decline persisted as it lost 3% of its coworking spaces in the most competitive markets. On top of that, WeWork also experienced a 4% Q-o-Q decline nationally — going from 195 coworking locations at the end of Q3 to just 188 at the end of Q4.

To see the methodology behind this industry report, visit CoworkingCafe.com.

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