U.S. Flexible Workspace Outlook Report

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The latest U.S. edition of the Flexible Workspace Outlook report is now available. The report, part of a series to be updated subsequently with data from Canada and Latin America, will be integrated with the APAC and forthcoming EMEA editions as well. This report highlights the current state and future trends of the flexible workspace market, how it is impacting both occupiers and investors, and where opportunity exists for our clients.

Key Takeaways:

  • Fast Growth – Flexible workspace continues to grow at a rapid pace, now accounting for one-third of office leasing in the last 18 months alone.
  • Focus on Enterprise – Some flexible workspace providers are aggressively targeting larger corporations (“enterprise clients”).
  • Talent Forward – Numerous companies see real value in flexible workspace providing the work environment to attract and retain the best young talent in the market.
  • Diversified Uses – Firms are leasing flexible workspace for everything from “surge” space to touchdown space for traveling employees to incubators for new products and project teams, among others.
  • Bright Shiny Object – Flexible workspace is one of the few growing sources of office demand, although it still makes up only a fraction of the office market, with 1.6% of all inventory in leading office markets. 
  • Changing the Model – Flexible workspace is impacting traditional leasing models and occupier client portfolios, together with the nature of how office space is designed and utilized. Traditional landlords are responding with their own flexible workspace and lease options.
  • Tech and High Wages – The concentration of coworking space is almost double in tech markets than in other markets. Coworking also concentrates in high-wage markets and cities with a large concentration of professional services firms. 
  • Downturn Ready? – Since the vast majority of flexible workspace came online after the Great Recession (late 2007 to mid-2009), its performance during a downturn is untested, but it could provide a buffer to landlords as occupier clients put a premium on flexibility during a downturn.
  • Testing the Economics – While the growth of major flexible workspace providers, in terms of leasing volume and locations, is undeniable, some providers are highly leveraged with corporate debt and could be susceptible to a market downturn, particularly if office rents start to decline. 

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U.S. Flexible Workspace Outlook Report

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