The growth of coworking spaces: What does it mean for the future of work?
Feb 27, 2024
4 mins read
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With the transition to remote and hybrid work growing at a rapid pace, it’s no surprise that many companies are seeking out coworking spaces as a way to downsize their physical office space and bring their teams together.
Organizations like Shutterstock have downsized their physical offices and brought their global teams together through a three-pronged flexible workspace approach. And hybrid work experts, like Dr. Gleb Tsipursky, are consistently seeing their clients shift to flexible workspaces as a means to promote the collaborative aspect of their teams’ needs.
Recently, Coworking Cafe analyzed proprietary data from the fourth quarter of 2023 to help us better understand the coworking landscape and its impact on the future of work. After we analyzed this in-depth report, we’re sharing the 3 most salient points.
National coworking supply on an upward trajectory
According to Coworking Cafe, there was a 1.28% growth between Q3 and Q4 (2023) in the national coworking inventory. While that might seem like a small increase, it does lend itself to a stabilization of the market itself. But more importantly, the vast majority of the markets saw increases in their inventories, with New Jersey landing at the top with 9% growth since the end of Q3. We can infer from this consistency in growth that the demand for coworking spaces is holding steady.
Los Angeles surpasses Manhattan with the highest number of coworking spaces
While Los Angeles was behind Manhattan in the number of coworking spaces (albeit by a very small margin), it jumped ahead of Manhattan in Q4. Behind Manhattan are Dallas, Washington D.C., and Chicago, rounding out the top five.
As far as surges in growth, New Jersey, Brooklyn, and Austin grew by 9%, 7%, and 6% respectively, which offered the highest growth amongst the 25 markets that were analyzed as part of this report.
Smaller coworking spaces are gaining popularity
Even though only two markets overall lost coworking square footage, seven of the 25 markets decreased their average square footage. The researchers in this report inferred that in many cases, the smaller, boutique coworking spaces are gaining traction in the market. And while these decreases are quite small, we’re seeing this trend amongst our customers, who are seeking customized and personalized experiences, with a focus on outstanding amenities and a concierge-level customer experience.
What does this mean for the future of work?
As more companies move toward virtual-first, remote, or hybrid-first settings, companies are tapping into coworking spaces as more than just an extra benefit or a way for employees to “get out of the house.” Instead, coworking spaces are becoming “the office” for a consistently growing number of organizations that need to drastically downsize their physical space but still provide their teams with a way to come together in a meaningful way. With coworking spaces providing concierge-level service that ranges from unique amenities for team building to company branding opportunities with the spaces, companies are moving away from hefty real estate contracts and spending money on flexible workspaces that execute their goal of “coming to the office” without breaking the bank.
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