{"id":25309,"date":"2019-12-03T15:10:35","date_gmt":"2019-12-03T13:10:35","guid":{"rendered":"https:\/\/www.commercialcafe.com\/blog\/?p=25309"},"modified":"2019-12-03T16:25:41","modified_gmt":"2019-12-03T14:25:41","slug":"highlights-yardi-matrix-coworking-report","status":"publish","type":"post","link":"https:\/\/www.commercialcafe.com\/blog\/highlights-yardi-matrix-coworking-report\/","title":{"rendered":"Highlights from Yardi Matrix Coworking Report"},"content":{"rendered":"

In October 2019, a special Yardi Matrix Coworking Report was released. It warned operators that coworking\u2019s rapid growth will be tested in the years ahead.\u00a0<\/span><\/p>\n

Yardi\u2019s study was based on a review of the leases of 5.5 billion square feet of office space in the top 50 markets in the U.S. The study covered buildings with 50,000 square feet or more in some metros and 25,000 square feet or more in others.<\/span><\/p>\n

The <\/span>Shared Space: Coworking\u2019s Rapid Growth Set to be Tested<\/span><\/a> report reveals that the coworking market continues to grow rapidly with new business models emerging.<\/span><\/p>\n

According to a study of Yardi Matrix\u2019s office database, the top 50 office markets contain a total of 93.2 million square feet of coworking space as of September 2019, or 1.7% of total office space.<\/span><\/p>\n

However, this steady growth may seem at odds with the recent press surrounding the major coworking operator <\/span>WeWork.<\/span><\/a> According to the report, WeWork’s recent fate \u201cdrives the impression the entire business model is at risk.\u201d<\/span><\/p>\n

Growth Comes From Confluence<\/h2>\n

In fact,\u00a0<\/span>according to the report, the continued growth of the coworking industry is a result of a confluence of trends in the office market. These include:<\/p>\n

    \n
  1. The rise of the gig economy<\/b> – which increases the number of independent workers who need flexible office space when working away from the home and conventional offices.<\/span><\/li>\n
  2. Growing employment in the tech sector<\/b> – which also increases the number of start-ups and independent contractors that want to rent small blocks of space.<\/span><\/li>\n
  3. Corporations wanting more flexible leases <\/b>– which need flexible space for their remote offices.<\/span><\/li>\n
  4. Worker demands<\/b> – today’s workforce wants office buildings with rich amenities and a strong community.<\/span><\/li>\n<\/ol>\n

    Urban Phenomenon, Suburban Potential<\/h2>\n

    Coworking has developed more quickly in urban areas than in suburban areas, with 63.3 million square feet and 30.4 million square feet respectively.<\/span><\/p>\n

    The report concedes that urban environments have a natural advantage over suburban areas though. For example, there is a greater concentration of workers, tech companies, and public transport links. In particular, coworking thrives in cities with large technology sectors.<\/span><\/p>\n

    The penetration of coworking is highest in new market economies and tight vacancy rates. Over the course of three surveys to date, a strong correlation is revealed between markets with low vacancy rates and high percentages of coworking as a share of stock.<\/span><\/p>\n

    The report reveals: \u201cManhattan<\/a>, San Francisco<\/a>, Seattle<\/a> and Boston<\/a>\u2014among the leaders in coworking as a percentage of stock\u2014 all have office vacancy rates below 10.0%, well below the 13.5% national average.\u201d\u00a0<\/span><\/p>\n

    \u201cMeanwhile, metros such as Houston<\/a>, Dallas<\/a> and New Jersey\u2014which have vacancy rates of at least 18.5% \u2014have a much smaller percentage of coworking space.\u201d\u00a0<\/span><\/p>\n

    However, coworking is expected to grow in suburban areas as the industry matures. This is because coworking will draw home workers and provide small satellite office spaces for large corporations.<\/span><\/p>\n

    Roster of Providers Still Small<\/h2>\n

    WeWork and Regus are dominating the market, accounting for 44.5 million square feet of leases. Between the last quarter of 2018 and October 2019, WeWork increased its space in the top 20 markets by 11.5 million square feet or 71.2%.<\/span><\/p>\n

    Other big gainers over the last year include: Spaces, which increased its portfolio to 4.2 million square feet, and Knotel, which increased to 2.7 million square feet. Regus\u2019s growth was relatively modest, adding 580,000 square feet year-over-year, up 3.7%.<\/span><\/p>\n

    Additionally, the report references WeWork\u2019s recent issues. It expects this will result in office owners giving \u201cextra scrutiny to coworking leases while large corporate users \u2026 are likely to think twice before getting involved in a situation that might create legal entanglements.\u201d<\/span><\/p>\n

    However, the report concedes, despite recent turbulent times, that \u201cit does not change the fact that corporations and small users alike increasingly demand space with the type of amenities that attract workers and flexible lease arrangements.”\u00a0<\/span><\/p>\n

    Evolving Business Models<\/h2>\n

    New business models are emerging within the coworking industry. For example, if a downturn occurs, there are concerns that the building owner would be left with high long-term expenses and minimal income. So, a partnership model has emerged where landlords are teaming up with coworking companies.<\/span><\/p>\n

    Coworking is also appearing outside of traditional office buildings in areas such as malls, college campuses, hotels, and new residential apartment blocks.<\/span><\/p>\n

    Yardi Matrix has identified 1,500 coworking properties outside of traditional office buildings, roughly 30% of the total facility count in its database.\u00a0<\/span><\/p>\n

    The report concludes: \u201cThe future of workspace will reward flexibility and design that helps employers attract workers in the knowledge economy. That would seem to guarantee a healthy future for coworking, although exactly how the business accommodates those demands is likely to keep evolving in coming years.\u201d<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

    In October 2019, a special Yardi Matrix Coworking Report was released. It warned operators that coworking\u2019s rapid growth will be tested in the years ahead.\u00a0 Yardi\u2019s study was based on a review of the leases of 5.5 billion square feet of office space in the top 50 markets in the U.S. The study covered buildings…<\/p>\n","protected":false},"author":202,"featured_media":25635,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2256,2547],"tags":[],"class_list":["post-25309","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-coworking","category-resources","wpautop"],"acf":[],"yoast_head":"\nHighlights from Yardi Matrix Coworking Report - CommercialCafe<\/title>\n<meta name=\"description\" content=\"The highlights from a special Yardi Matrix Coworking Report, warning operators that coworking\u2019s rapid growth is set to be tested in the years ahead.\u00a0\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialcafe.com\/blog\/highlights-yardi-matrix-coworking-report\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Highlights from Yardi Matrix Coworking Report\" \/>\n<meta property=\"og:description\" content=\"The highlights from a special Yardi Matrix Coworking Report, warning operators that coworking\u2019s rapid growth is set to be tested in the years ahead.\u00a0\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialcafe.com\/blog\/highlights-yardi-matrix-coworking-report\/\" \/>\n<meta property=\"og:site_name\" content=\"CommercialCafe\" \/>\n<meta property=\"article:published_time\" content=\"2019-12-03T13:10:35+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-12-03T14:25:41+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialcafe.com\/blog\/wp-content\/uploads\/sites\/10\/Yardi-Kube.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"500\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Gemma Church\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@geditorial_uk\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Gemma Church\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialcafe.com\/blog\/highlights-yardi-matrix-coworking-report\/\",\"url\":\"https:\/\/www.commercialcafe.com\/blog\/highlights-yardi-matrix-coworking-report\/\",\"name\":\"Highlights from Yardi Matrix Coworking Report - 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