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US Coworking Space Market

The coworking movement is no longer the preserve of freelancers and start-ups, it's gone mainstream with larger organizations, and even Fortune 500 companies, embracing the flex space model.

With approximately 80 million square feet of dedicated coworking space, the United States is the world's largest coworking market. The popularity of this office solution has been greatly boosted by the rise of the sharing economy, the widespread adoption of agile working methods, the growth of a remote workforce, and strong demand for more balanced and flexible working environments.

While coworking only accounts for a small percentage of the total office supply in the United States, this type of office space is constantly growing and some expect that by 2030, approximately 30% of all office space taken up in the US will be flexible space.

There are hundreds of operators offering coworking space as part of their portfolio, ranging from small independent venues catering to niche sectors to high-end coworking spaces in some of the nation's prime central business districts.

Who Wants Coworking Space?

Gone are the days when coworking spaces were exclusively occupied by freelancers and remote workers. Over the past few years, the coworking occupier profile has become more diverse. This type of office accommodation appeals to corporates just as much as it does to small start-ups and individual entrepreneurs. In fact, some of the top Fortune 500 companies have taken up coworking space, including Microsoft, IBM, Facebook, Bank of America, and Salesforce.

Similarly, hybrid coworking models (which combine coworking space with optional private offices) are quickly gaining popularity among corporate teams and departments that require additional office space to work on a project basis.

Because coworking spaces are naturally flexible, they attract businesses in a variety of industries, with the most common being finance, professional and business services, and information. As niche coworking models continue to expand, so does the range of industry sectors that find coworking an appealing option, from media and film to legal and biotechnology.

Diversity is also evident in terms of occupier size, as these spaces are taken up by large corporates as well as by small companies. In summary, coworking is an appealing option to any business that wants to adopt a modern work style while minimizing risks and capital expenditures.

What's Included in Coworking Space?

Exclusive amenities are one of the biggest draws of coworking space. This type of office accommodation is increasingly being driven by the hospitality concept, where offices become experiences in themselves, with a focus on generating well-being and productivity.

Coworking memberships exist at different levels, so they can be easily tailored to the occupiers' needs. This means that although the amenities vary, they typically include:

  • Fully equipped workstation space, whether in the form of hot desks, dedicated desks, or private offices.
  • Reception / support staff.
  • Cleaning / janitorial services.
  • Utilities.
  • Telecommunications infrastructure (phone, fast Internet, etc.).
  • Kitchen / coffee stations.
  • Quiet lounges / relaxation areas.
  • Wellness amenities such as equipped gyms, showers, changing rooms, and bike storage.
  • Dedicated collaborative space and access to in-house events, like talks and seminars run by experts.

Why Choose Coworking over Other Types of Office Space?

  • Flexibility is one of the key perks of coworking. This office accommodation model offers superb scalability, so it suits companies in different growth stages.
  • Fewer risks: short and flexible lease terms entail fewer risks and liabilities than those represented by traditional long-term leases .
  • Lower costs: as a coworking member, you will only pay for what you need, reducing capital expenditure and making optimal use of your resources. On average, coworking space can be anything between 10 and 30% cheaper than traditional office space.
  • Turnkey delivery: coworking space is ready to go, so you can simply move in and start working.
  • A wide choice of both large and independent operators: in the US both types of coworking providers are extremely well represented.
  • Talent attraction and retention: coworking spaces are better positioned to attract Millennials and those who prefer open and flexible workspaces designed to boost collaboration and innovation.
  • Unparalleled opportunities for collaboration and networking, which are an integral aspect of the coworking culture.

Where to Find Coworking Space

Generally speaking, coworking options are more plentiful in markets that meet two conditions: low vacancy rates for conventional office space and high costs of real estate. A high concentration of businesses involved in the tech sector is another factor that influences the availability of coworking space in US cities.

Although demand for coworking space is robust across the United States, the three fastest growing markets are:

Also topping the lists of states with the highest number of coworking centers are Florida, Illinois, Colorado, Georgia, New Jersey, and Pennsylvania. Washington DC, Miami, and Chicago are also considered gateway markets offering a highly diverse range of coworking space.

How Much Does Coworking Cost?

The average rate per workstation across all states is approximately $750 / month. The most expensive locations are in the states of Colorado and Massachusetts. The lowest average desk rates can be typically found in North Dakota, Mississippi, Indiana, Arizona, and Arkansas, where workstations cost under or around $500 / month. Prices for coworking space in New York City falls somewhere in the middle, despite the city's reputation for having pricey office space. While Manhattan commands some of the most expensive coworking rates in the US, rates in other boroughs fall within the national average.

Keep in mind that some states are experiencing rapid growth in terms of coworking availability. These include New Hampshire, Missouri, and Louisiana, all of which have undergone double-digit annual growth rates. Growth is also noticeable in cities like San Jose, San Diego, Boston, and Austin. With the exception of Texas' capital, the most expensive coworking spaces are mostly concentrated along the West Coast.