The U.S. market for co-working and flex space has been experiencing "sensational growth," according to the U.S. Market Survey by The Instant Group. Expansion of these spaces within the U.S. is being driven not only by the giants of the industry -- Regus, Servcorp and WeWork, which dominate the European market – but also by entrepreneurial operators that have just one or two centers catering to niche audiences. While the top 10 operators account for 34 percent of the U.S. market, over 93 percent of the operators are independent, or "indie" operators. Related: Female-focused workspaces are having a moment On the demand side, interest in co-working space is being driven my a shift toward less stressful office environments and more flexible working arrangements for employees. The report sites surveys by Staples and Gensler that said 64 percent of workers think the office environment contributes to stress and 1 in 4 workers consider their work environment "optimal." Flexible workspaces allow employers to pass off much of the work of creating a top-notch, amenity-filled environment without requiring a decade-long lease commitment. Centers are popping up across the country, though three states -- New York, California and Texas – are still growing faster than the rest of the U.S., with an average increase in supply of 12 percent compared to 4 percent elsewhere in the country. Business in these states is dominated by the cities of San Francisco, Los Angeles, New York City, Houston and Dallas. While the flex market is continuing to expand, the majority (51 percent) of the total number of centers are located in just five U.S. states. The top seven city markets still retain a third of flex space/co-working centers, and the top 20 contain more than 50 percent of the total market share. "There is much more expansion to come across the U.S., particularly in those cities outside the more established markets of NYC, LA and San Francisco," says Michelle Bodick, managing director, sales & marketing, The Americas at The Instant Group. "We strongly anticipate flex space growing proportionately as part of the commercial real estate mix across the country." The average monthly desk rate across the U.S. was $763 in 2017, up from $747 the prior year. The most expensive states are Colorado and Massachusetts with Average monthly desk rates at $1250 and $1213, respectively. New York State retains a strong average desk rate of $1063, which is a slight decrease on 2016, due to the distribution of additional centers across the state with lower prices outside of Manhattan.
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Katie Kuehner-Hebert
Katie Kuehner-Hebert is a freelance writer based in Running Springs, Calif. She has more than three decades of journalism experience, with particular expertise in employee benefits and other human resource topics.
