WASHINGTON, DC–Sooner or later the co-working space is going to enter a period of maturation, a phase usually marked by consolidation and moderated growth. It probably won't be in 2017 though: if anything co-working is still on a rapid growth trajectory. Last year there were around 7,800 coworking spaces in operation around the world with the US the leading country, according to Statista. By 2018, that number is predicted to reach 37,000. In many cases this growth will be due to expansion within cities and into new location.

This story will play out, as all real estate stories do, on a market-by-market basis though. And while Washington DC is not likely to see a scaling back of co-working growth either, there are some interesting elements that bear watching. Globest.com spoke with Revathi Greenwood, CBRE's director of Research about what she expects to see in 2017 in the local market.

On co-working's huge growth engine to date.

Washington, DC's co-working segment continued to drive occupancy, accounting for 9% of leasing activity year-to-date, up from 2% in 2015. Coworking in DC metro in 2016 has contributed 465,000 square feet of net absorption.

On the one player you can't ignore.

With 280,000 square feet of net absorption, WeWork expanded operations to more than 200,000 square feet of space in the Capitol Riverfront and 117,000 square feet in the East End. Fifty percent of co-working leasing in 2016 was from WeWork alone — this is counteracting a lot of the contractions from other market sectors such as legal and government. To reiterate: half of growth is being driven by one company.

What that means for the DC area.

Washington DC is currently WeWork's second largest market next to New York City. While we don't know WeWork's expansion plans, according to the news released earlier this year, they have raised more funding for far east expansion.

Is the market becoming oversaturated?

No, the market is not oversaturated — but there are opportunities to weed out smaller players.

Conversely, will smaller players see opportunity and continue to enter the market?

The barriers to entry are low. As long as the financials still work, smaller operators will enter.

Instant Insights /

How Revathi Greenwood Thinks Co-working Will Play Out Next Year

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