Coworking's unstoppable market growth

After more than nine years of economic growth, employers are having a tough time finding talent and occupancy growth is slowing. With that, the flexible space/coworking sector has emerged as the primary growth driver within the office market. Expansion from this sector claimed more than a quarter (29.4 percent) of the total U.S. office absorption over the past 24 months (18.1 million s.f.). No segment of the market has demonstrated more overall growth than the coworking industry. Given the massive amount of venture capital that’s being poured into the sector, this aggressive growth rate shows no signs of slowing.

That’s why we expect flexible space to remain one of the office market’s primary growth catalysts for quite some time.

* Under 5% of current U.S. office inventory is controlled by independent, third-party flexible space providers (spanning all operator types, from traditional executive office suites to coworking to incubators). Given industry shifts, flexible workspace and shared amenity spaces are projected to encompass approximately 30% of the office market by 2030.

Although flexible space is often the most simple and affordable space option for individuals and small groups, as users achieve scale and accrue more time at a single location, the per-square-foot occupancy costs of flexible space arrangements may exceed traditional lease models.

In addition to cyber-security risks, the open design of most flexible space locations could inhibit the safeguard of intellectual property.

Although a group of employees working together within a flexible space environment could stimulate collaboration and the structure could enable enhanced supervision over a mobile workforce, companies must be mindful of flexible space's impact on productivity.