Market Trends of North America Coworking Spaces Industry
Increasing number of Startups Boosting the Market
As the cost of private office space rises, many entrepreneurs opt for coworking spaces, fueling the expansion of the coworking space industry. Last year, investors poured USD 329.5 billion into startup investments at all stages over a year. This is a 92 percent increase above 2020, record-breaking levels. The year also concluded on a high note, with fourth-quarter investment totaling USD 88.9 billion in stages.
In North America, number of business applications was the highest on record in the previous year, a stunning 53 percent increase over the total filed applications in 2019 and a 23 percent increase over the total filed applications in 2020. In 2021, about 5.4 million applications to start new firms were lodged, the highest of any year since 2005. The exceptional filing rate translates into about 1.9 million more business applications in 2021 than in 2019 before the pandemic, a 53 percent increase.
The US leads the Coworking Spaces Market in terms of Real Estate (Sq. feet)
In terms of size, North America has the most coworking spaces, with an average of 9,799 square feet per location. The increased acceptance of flexible work methods, service offices, and remote teams fuel this massive demand for coworking space, with coworking giants like WeWork and Regus managing 23 million square feet.
New York has the largest concentration of flexible working spaces, with over 330 coworking centers. The Instant Group, a global workplace innovation organization, forecasts a 19% growth in flexible office space demand in New York City in 2022 over 2021, while supply - the number of flexible workspace centers in the market - has increased by 7% to 495 spaces. This expansion is most visible in Manhattan and Brooklyn. New York City's flexible office space supply mostly comprises hybrid spaces, which represent 51% of the market. Following that, serviced offices account for 34%, while coworking spaces account for 15%.
This growth is being led not only by freelancers and start-ups looking for casual coworking environments but also by larger corporations utilizing this flexible space to expand their business in a controlled and affordable manner. New York isn't the only place in the US experiencing a growth spurt. Los Angeles, San Francisco, and Chicago have all witnessed more than 15% year-on-year growth in coworking spaces with currently over 566 workspaces.
