Coworking Landscape in Q3 2023: Insights & Trends

The rise of remote and hybrid work models, along with the increasing popularity of flexible work arrangements, has significantly contributed to the growth and expansion of the coworking industry. As a result, the demand for coworking spaces has soared, and coworking companies have emerged as key players in the modern work landscape.

So, to provide a comprehensive and up-to-date overview of the current state of the coworking industry in the top 25 markets in the U.S., CoworkingCafe conducted an extensive analysis of its own data from Q3 2023. The purpose of this analysis was to delve into the recent developments and trends within the industry by comparing key metrics such as occupancy rates; expansion strategies; and market penetration to the previous quarter, Q2 2023.

National Coworking Supply: Achieving Balance & Steady Growth

In the latest quarter, the national coworking inventory reached a state of balance with a total of 6,172 spaces. This represents a small increase of 0.15% compared to the 6,163 spaces in Q2. It’s also worth noting that the growth rate has now stabilized, following a significant surge of 10% from Q1 to Q2.

Among the top markets, 13 experienced a decline in coworking spaces. Manhattan, N.Y., was particularly affected, with a decrease of over 10%. However, there were also positive trends in the industry. Both Raleigh-Durham, N.C., and Phoenix showed impressive growth rates, with Raleigh-Durham witnessing a 13% increase and Phoenix experiencing an 11% growth.

Virtual Office Rates More Affordable in Q3

In terms of pricing, the median rate for virtual offices in Q3 dropped to $125 — a 12.5% reduction from June’s $143. Among the cities, Washington, D.C. had the lowest median price at $80, followed by Miami at $99. On the higher end, both Chicago and New Jersey exceeded the $200 mark with rates of $205 each.

Moving on to open workspaces, the national median price remained consistent at $149. However, there were some locations that offered open workspaces below the national median, including Phoenix; Orange County, Calif.; and New Jersey with prices as low as $119. Conversely, Brooklyn, N.Y., and Manhattan had the highest prices for open workspaces at well above the national rate.

As for dedicated desks, they maintained a median price of $329. Here again, Manhattan and Brooklyn surpassed the national median for dedicated desks with prices reaching $529 and $455, respectively.

Leading Coworking Markets: Manhattan Declines, but Still Holds the Lead, Raleigh-Durham & Phoenix Thrive

In Q3, Manhattan had the largest decrease, losing 11% of its coworking spaces. In contrast, Los Angeles had a minor decrease of 1%. This resulted in a significant narrowing of the gap between these two cities. At the same time, Washington, D.C. maintained a strong presence with 251 spaces, while Chicago and Dallas-Fort Worth swapped positions with Chicago seeing a 2% decline and DFW experiencing a 5% increase.