The Primary Driver of Office Market Growth in America
According to JLL, flexible workspaces and office co-working companies are driving growth in the U.S. office market. Since 2010, flexible workspaces have grown by an average annual rate of 23%. In the past two years alone, such spaces have accounted for 18.1 million square feet, or 29.4%, of office space.
As flex-space formats grow and co-working becomes more common as companies like WeWork continue to expand, the office market is shifting. It has spurred companies like WKO, owner of five Class A buildings in Manhattan, to roll out its own flexible workspace format called Swivel. This shifts the perspective from commercial real estate’s typical focus on price-per-square-foot, to instead showcase density and the ability to maximize the number of employees on the floor.
Furthermore, owners are taking a cue from the hospitality industry and creating franchise agreements. For example, Serendipity Labs is drawing partners in secondary markets where franchisees commit between $1 to $1.5 million to operate multiple co-working sites.
JLL predicts that by 2030, 30% of office space will be occupied by flexible spaces and shared amenity areas.
For comments, questions or concerns, please contact Daniella Soloway
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