Keyword: coworking trends
Meta: Coworking and Flexible Office Pricing has fluctuated widely during the Covid -19 Pandemic. Find out which markets are expensive, and which aren't.
In just one quarter after a difficult pandemic year, coworking trends have begun to thaw. 2021 is proving to be the year of return for flexible office space. The value proposition is strong, occupier demand is returning, and smart operators in strategic markets are well-positioned to ride post-COVID-19 office trends to growth.
One thing the pandemic has shown us is that pricing has more to do with supply and demand than underlying real estate cost. In fact, demand is spreading to secondary markets, and in North America's most expensive cities, the coworking and flexible office price per seat is decreasing. For operators in the top 5 most expensive coworking markets, like Boston, New York City and Austin, right-sizing pricing will be critical to drive deals. For occupiers ready to act, high price fluctuation could present leverage to get the best value.
Last year saw one in five (21%) of U.S. and Canadian coworking locations close. These coworking closures were dominated by large, well-funded operators such as Breather, WeWork, Knotel, and Serendipity Labs, who used the pandemic as an opportunity to close underperforming locations and future-proof their portfolio. Now, with coworking trends on the road to recovery, these and other strategic flexible space operators are well-positioned to support new demand and ride post-COVID-19 office trends to growth. This perseverance is a testament to the strength of the flexible office market.
Why is coworking and flexible office more attractive than ever? The main reason is an increasingly mobile workforce. Companies are navigating the post-pandemic uncertainty with a more decentralized and remote workforce. Short-term flexibility has become even more desirable than regular long-term office leases through the course of the pandemic, companies need help to adjust to hybrid office trends. Many companies are adopting a hybrid model where some their employees work remote some of the time. As the purpose of office is reconsidered as a space for learning development, collaboration and socializing, the conversation is moving towards a workplace ecosystem where flexible space is one strong tool in the employer toolbox.
The Flex Office Pro Demand Map shows lead volume is variable across North American markets. (Source: Upsuite Flex Office Pro)
Coworking trends are responding accordingly: occupier demand is back on the rise in Q1 2021, and U.S. average asking price trends are starting to steady. This is creating interesting opportunities for occupiers and operators alike in different markets.
Demand Trends show North America's average listings views are back on the rise in Q1 2021. (Source: Upsuite Flex Office Pro)