The State of the Coworking Market
According to our research, there are 4,043 co-working spaces in the United States, as of the year 2017, while the expected yearly growth rate is 9% (2017 to 2022). In total, there are an estimated 27.3 million square feet of co-working office space in the United States. Vermont is undergoing the most notable growth in co-working spaces in the country as 12.1 spaces are opening up in the state every year per 1 million people. Nonetheless, New York City has both the greatest amount of flexible workspace and a higher share of office space than other large cities. Finally, a recent takeover that could fuel growth in the market is WeWork's acquisition of the data platform Euclid in 2019.
STATS ON THE INDUSTRY
The total number of co-working spaces in the United States is around 4,043, as of 2017. From 2017 to 2022, the projected average annual growth rate for this market in the country is about 9%. As reported by Colliers International, the yearly growth in the volume of co-working spaces is anticipated to be 6% between the years 2018 to 2022. Meanwhile, member growth in the United States is expected to rise by 14.7% every year. In 2018, co-working spaces occupied approximately 27.3 million square feet of total office space or 1.6% of all office space in the nation. That same year, 2,188 co-working spaces were established globally. Of that number, nearly 1,000 were in the United States, according to Co-Working Resources.
MAJOR ACQUISITIONS THAT COULD FUEL GROWTH IN THE INDUSTRY
- Managed by Q Inc., which is a business that concentrates on on-demand office and subscription services, was acquired by WeWork in 2019.
- Euclid, a data platform that follows the behavior and identity of individuals within the physical world, was acquired by WeWork in 2019. The company plans to blend Euclid into workplace insights and market it to businesses seeking to "WeWork-ify their own offices."
- Cross Campus, a provider of shared office spaces, acquired DeskHub in early 2019 to expand the company's presence on the West Coast.
WHERE THE CO-WORKING MARKET IS GROWING IN THE UNITED STATES AND WHY
The area of the United States that is experiencing the most growth in co-working spaces is Vermont, which has about 12.1 spaces opening each year for every 1 million individuals. This growth is caused by the growing startup scene in Vermont, along with the busy innovation hub in the city of Burlington. Following Vermont is the District of Columbia, Montana, Colorado, and New York with 11.1, 8.5, 8.0, and 4.4 spaces, respectively, per 1 million people. New York, however, has the highest amount of flexible workspace. The area also has a higher share (2.1%) of office space than the average large municipality. In fact, a co-working space is established in New York City every 7.5 days. Manhattan has the highest volume of added space, with over 3.3 million square feet in co-working leases supplied since the year 2016. Boston, Seattle, and San Francisco follow Manhattan.
The rise in co-working spaces in New York can be attributed to the presence of entrepreneurs, as well as the population. On the other hand, San Francisco's increase is the result of the entrepreneurs and tech industries present in the city. Co-working developed the quickest in Raleigh-Durham and Dallas. These particular areas were able to double their co-working locations in a span of 18 months thanks to tech firms seeking to entice second-tier markets beyond large municipalities.