SEATTLE—Despite coworking inventory growth, coworking still accounts for only 1%—47.8 million square feet—of the total 5 billion square feet of office inventory across the 87 markets tracked by Cushman & Wakefield. The firm's coworking and flexible office space report examines coworking and flexible-office trends, and the implication for the commercial real estate industry and its participants.

“Based on current near-term projections, coworking space could easily triple from its current share in gateway markets over the next decade,” said Revathi Greenwood, Cushman & Wakefield head of Americas Research and the report's lead author. “Total inventory could increase to over 5% of office space in many urban markets and as high as 10% in some markets.”

Manhattan coworking space accounts for less than 3% of office space. The other gateway markets are in a similar range with somewhere between 1% and 3% of office inventory in coworking space. Approximately half of all coworking inventory is in the six gateway markets of Manhattan, Los Angeles, San Francisco, Chicago, Washington, DC and Boston.

Non-gateway markets such as Seattle have more than 1 million square feet of coworking space. Others in that category include Atlanta, Dallas/Fort Worth, Denver and San Diego.

This growth is bolstered both by structural changes in the workforce and a changing profile of coworking users. Job growth in office-using industries—information, financial activities, and professional and business services—is also increasingly driven by small businesses. In 2017, small firms accounted for 89% of new job growth, up from 69% in 2000.

At the other end of the spectrum, coworking and flexible spaces are increasingly attractive to enterprise users, and providers are taking notice, actively promoting locations and services to large occupiers. According to Emergent Research, the percentage of WeWork members who work for companies with more than 100 employees quadrupled from 2010 to 2017. They now account for 12% of members. During the same period, freelancers/independent workers' share of memberships decreased from 68% to 39%. This matches the trend in the broader industry in which freelancers have moved from 55% of all memberships in 2012 down to only 41% in 2017.

“Occupiers' demand for flexibility is not going anywhere,” said David C. Smith, Cushman & Wakefield vice president and head of Americas occupier research, and co-author of the report. “The largest coworking providers continue to expand their portfolios at a dramatic pace.”

Instant Insights /

Coworking Space May Triple From Current Share

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