A coworking space in San Francisco. Image Credit: Josh Hallett (CC by SA-2.0)
According to a recent report from Cushman & Wakefield, the amount of office space devoted to coworking facilities could triple over the next ten years. Currently, coworking space occupies a mere 1% of total office space nationwide, but this could rise to as high as 5% by 2028, and even 10% in some markets.
New York leads the nation in coworking space with over 10 million square feet in Manhattan alone, making up a bit less than 3% of the island’s office real estate. Other gateway markets such as DC, Chicago, San Francisco and Los Angeles have coworking occupancy percentages in the 1-3% range. Many non-gateway cities such as Seattle, Dallas-Ft Worth, Atlanta, and San Diego also contain an impressive amount of coworking space with about 1 million sq ft apiece, similar to that of the gateway city of Boston. All of these markets are likely to grow in the coming years. This is largely due to the fact that small businesses contribute to an increasingly larger proportion of job growth for office-using industries. The first half of 2018 alone saw an additional 3 million square feet of growth in shared workspace.
The study also produced findings on the perceptions of coworking spaces by investors. Generally, investors and landlords are comfortable with coworking space occupying about 15-30% of a building. Additionally, the report found coworking to be in a good position to weather an economic downturn. The authors noted that while coworking real estate opportunities growing only about 30-40% of the growth is additive as opposed to re-purposing of existing office space.
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