The Diversity of the US Flexible Workspace Market

Monday, February 5 , 2018

The US flexible workspace market is one of the most diverse in flexible workspace with the market being largely saturated with a range of niche, independent operators.

The US market for co-working and flexible workspace has gone from strength to strength over the last year with significant growth spreading from its traditional core in New York, LA and San Francisco, right across the country.

And while the larger flexible working giants of the industry continuously hit headlines for rapid growth, it is the entrepreneurial operators that underpin much of this growth.

More than 50% of all centers are run by independent operators in a highly fragmented market – there is no other global market like it, in fact. Other large global markets such as the UK, Germany or France are typically dominated by larger operators, such as Regus, Servcorp or WeWork.

So why is the US different?


In the US there has been an increase of the ‘niche’ workspace. Over the last 12 months in particular there has been a rise in ‘indie operators’ catering for specific occupier requirements.

For example In New York we saw the opening and proliferation of The Wing, in Denver Women in Kind, and Quilt in LA – the response to demand for women-only co-working spaces.

In fact, The Wing raised $32 million in investment from co-working giants WeWork as well as an 8,000-person waiting list for their ‘no man’s land’ spaces.

And these spaces aren’t popping up based purely on gender; industry, creativity and wellness spaces are emerging across the US.

ExtraSlice raised $1 million to expand their tech-focused space to service a new range of clients, demonstrating that investment has an appetite for such diversification and targeted clientele.

The demand is there…

Indie operators have seen rapid increase in demand for their spaces; for example The Yard, founded in 2011, has had such a positive response to their spaces that they have “plans to double membership by the new year” according to TechCrunch.

Whilst another independent operator, Knotel, has raised $25 million in series A funding as well as now having 15 locations around New York City despite having only been founded in 2015.

Independent operators are seeing increased demand as those seeking flexible space are looking in new areas as well as alternatives to larger occupiers, such as WeWork.

Government support aids independent operators…

In 2017, the state of Maine passed a bill to provide a further $300,000 into the Maine Co-working Development Fund which was created to provide state funding for co-working spaces throughout the state.

Previously, workspace owners and operators have sought investment through traditional methods; family/friends, private accelerators and angel investors.

The investment by the state encourages and fosters the growth of the independent operators; with the bill’s sponsor, Representative Ryan Fecteau, saying that flexible spaces are integral to the state’s economic future.

Sticking to where and what they know…

According to our research, 94% of the market are single city operators, of which we listed 2,002 last year in comparison to 1,841 the year before, highlighting again the entrepreneurial proprietor of one or two centers underpinning the market of flexible space.

This also applies to the rest of the country where 90% of operators within the US market are enjoying success by offering unique spaces providing improved amenities for the end user.

Will this continue?

As the market shows no sign of stopping, and the operators continue to receive record funding from investors, the US will continue to be a highly fragmented flexible workspace market made up of larger and smaller independent operators.

This trend is founded on the operators knowledge of their patch. They know the reasons behind the demand. They also know where demand will come from in the future. And have evolved sophisticated and economically viable supply chains in each area,” he explained.

The co-working and flex space model can be challenging, particularly at the point of setting up and it is a lot more practical for operators to stick to an area they understand and are comfortable with. Hence we are seeing this fragmented market which will in variably evolve but at the moment the happy outcome of this is that the operators in question really know their market, how best to curate the space and provide a great service to their user base.


Gethin Davies
Gethin has been with The Instant Group for over six years and has been an integral part of the company’s growth since 2010. He is currently based at The Instant Group's office in New York City using his expertise within the industry to build global relationships and capitalise on a growing market share in flexible working.
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