How fast is the flexible workspace market growing in the US?
The most comprehensive study of flexible workspace in the US shows that the contingent workforce is on the rise, with corporate occupiers driving massive growth in the US flexible office market in 2015/16. Combination centres offering both executive suites and co-working spaces have expanded by 12.9% in the last year alone, and this is largely driven by a 10% growth in co-working across the country.
Compared to conventional executive suites, which have only increased by 3.4%, centres that offer some form of co-working have increased fourfold. Having increased by an average of 4.3%, the flexible workspace market now includes 3,596 centres. The US represents the largest market, while the UK follows close behind with 3,290 centres.
State with the Most Flexible Office Space
Interestingly, 50% of the total flexible workspace market is located in five states, making the US market relatively concentrated. California is the frontrunner as the state with the most flexible space and the most dedicated co-working spaces. This is largely due to the TAMI (Technology, Advertising Media & Information Technology) firms of San Francisco and Palo Alto, which have introduced co-working company-wide.
The sunshine state is now home to 103 ‘pure’ co-working spaces, which is double that of any other state in the US. This trend is no doubt a result of the inevitable spread of Silicon Valley’s famed collaborative workspace concepts to the rest of the local market.
Most Expensive City for Flexible Workspace
• Over the past year in NYC, desk rates decreased by 2.9%, yet it remains the most expensive city in the US for flexible workspace at $1,047 per desk, per month.
• Coming in at a close second is Washington DC, with an increase of 17.2% on the previous year. The monthly cost of an average workstation is $1,022.
• Having experienced an 11.5% growth in workstation rates, San Francisco takes third place on the list of most expensive cities.
US Cities with the Strongest Growth
The greatest proportional growth in flexible workspace hasn’t occurred in any of the top ten largest cities in the US. Instead, locations like San Jose, Portland and San Antonio have shown growth of up to 15%.
The most revealing statistic relates to San Francisco and Washington DC, two of the more mature markets in the US. Despite the supply of space having increased by 6.3% in San Francisco and 7.3% in Washington DC, workstation rates have increased by 11.5% and 17.2% respectively. This suggests that the market has enough demand to support large increases in supply and aggressive rate hikes. Both of these areas look set to grow in the coming year.
Download the report for more insights on the state of flexible workspace in the US or speak to a specialist at Instant Offices.