The commercial real estate market for flexible workspace continues to show a lot of promise – and not just in the areas you’d expect.
Co-working and the rapid growth in flexible space originated in the key city markets of California and New York City but has now expanded across the US.
With falling unemployment and growth in the number of contingent workers, there is even more competition for space in the US’ largest urban centres. Vacancy rates are reaching all-time lows, so occupiers and SMEs are looking flexible workspace options in other locations.
Looking at our recent data, flexible workspace operators of both co-working and executives suites are increasing supply of space to meet this demand but prices are still increasing as there simply isn’t enough supply to match demand.
Prices have been rising for time in San Francisco, and the surrounding tech hub, and its Californian counterpart, Los Angeles has seen huge growth.
Similarly prices have surged in NYC and Washington DC on the West Coast, despite strong growth in workspace supply.
New York takes the top spot for most expensive place in the world to rent a desk, at $1,100 pp/pm, according to our Global Cities Report, and San Francisco isn’t far behind at $1,086 pp/pm with a steady 17% growth between 2016 to 2017.
But competition for space in these markets and rocketing living costs means we are seeing many other areas which offer many benefits in terms of office space and quality of life.
Alternative locations, outside of the aforementioned areas, are becoming more sought-after, and some of the biggest names in commercial real estate aren’t ignoring these promising locations, such as Plano, Denver and Tampa, Florida.
Recently co-working titan, WeWork, have announced a 10-story office in Raleigh, North Carolina, which is scheduled to open in 2019.
Understandably so considering that Raleigh reports a growing population, including a surge of millennials setting within the area, and the 20-year-old to 34-year-old crowd already accounts for 23% of the population.
And this number is set to increase with a job satisfaction rating of 3.3 and a median base salary of $62,000, according to Glassdoors, which isn’t far off the median salary of $70,000 in Washington D.C. with substantially lower living costs making it desirable for both commercial and residential real estate.
Raleigh is just one of many promising locations within the US – other cities such as Dallas, Denver and Houston are becoming areas in which many hopeful companies are seeking to settle with reports of thriving business alongside slightly less concentrated locations with lower financial outlays of settling there.
Whilst California currently leads the way as the state with the most flexible workspace, according to our Global Cities report, it’s evident that now is an exciting time to be seeking workspace across the US – with a broad range of options available.
Providing flexible workspace for companies of all sizes, in an array of areas, is something Instant has been doing for over 16 years, having delivered more than 4 million square feet of office space for clients all across the world. We use data and relationships with leading landlords to source workspace, and with a world class supply chain create a branded space for our clients, that is managed on their behalf by a team of Instant experts.
For world leading brands such as Amazon and AMEX, this is a key element of their global real estate portfolio and it is a growing trend.
Find out more about Instant’s Managed Office at the link below or email me at [email protected]