In North America, Average Requirement Size for Flexible Workspace Rose 32 Percent in 2023 Over 2022, Demand Up 19 Percent in Q3 Over Q2 Despite Industry Challenges, According to The Instant Group's Latest Market Report

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Nov 16, 2023, 15:40 ET

NEW YORK, Nov. 16, 2023 /PRNewswire/ -- The Instant Group, the largest global marketplace for flexible workspace, has found that, despite persistent challenges in the sector, demand for flexible workspace was up 19 percent in Q3 2023 over Q2 2023 and the average requirement size increased 32 percent in 2023 over 2022 as larger occupiers utilize flex to enable quick portfolio adjustments. These findings were released in Instant's North America State of the Market Report.

The report can be viewed here. Findings included:

North America Market by Market Average Desk Rate and Rate Change

Market Challenges

Rising operational costs: 60 percent of operators cite rising OpEx costs and inflation as the most challenging market conditions, among others.
A post-Covid demand bubble is driving a new wave of supply, leaving some markets overexposed. Where demand has decreased to pre-Covid growth rates, such as New York City and San Francisco, some operators who were already over-exposed or undercapitalized are feeling the pressure.
Occupancy challenges: Despite rising demand, a quarter of operators see growing occupancy as the most important challenge.

"In markets such as Toronto and Miami with a clear supply-demand imbalance, there is an opportunity for operators and landlords to open new centers, whereas in markets with declining rates, flexible workspace providers must be nimble in their thinking and adapt additional revenue streams within their flex spaces with products and services such as virtual offices and meeting and conference rooms," said Ben Wright, Executive Director, Partnerships, Americas, The Instant Group. "As we look to the future, we will see operators and landlords relying on data to find the assets and markets that are best positioned for flex, and debuting or expanding on the products and services that occupiers are looking for as they grow in flex."

Current Trends and Implications for the Future of Flex

Amenities are on the rise: U.S. occupiers expect more from their workspaces and are more specific in what adds value compared to other regions throughout the world, with 30 percent of all amenity searches globally attributed to the U.S. Flex space providers will seek to offer more than office space. They will aim to offer a more diversified proposition that aligns to occupiers' needs.
People-led hospitality is the key differentiator between flexible workspaces and other leasing options such as traditional office space. Premium service and hospitality will continue to add value to flex propositions and help to attract and retain occupiers.
Workspace providers plan to expand, with 60 percent of landlords expecting at least 20 percent of their portfolio to be flexible by 2030 and 53 percent of operators planning to increase their footprint in the next two years. Competition will heat up in the industry, driving providers to focus on the products and services that distinguish their brand from others.

Methodology
Data and insights from this report are compiled from The Instant Group's proprietary flexible workspace database, which tracks supply, demand and transactional data, and primary research, via the Future of Flex survey, conducted in Q3 2023 across 200+ operators and landlords.

About The Instant Group
The Instant Group has been rethinking workspace since 1999 with over 500 experts working globally across more than 175 countries. Instant's digital platforms constitute the world's largest digital marketplace for flexible workspace listing meeting rooms, virtual offices, flexible office space and coworking memberships. Its global team advises on commercial real estate solutions from serviced offices to fully customized managed offices, and consulting services for portfolio and net zero strategies. Instant's approach enables agility, hybrid working solutions and improved operational resilience for more than 250,000 businesses every year. Clients include; Prudential, Booking.com, Shell, Jaguar Land Rover and GSK. Instant has global offices including London, Paris, New York, Hong Kong, Singapore, and Sydney. Across the Americas, Instant coverage includes: Atlanta; Buenos Aires; Charlotte; Chicago; Dallas; Durham, NC; Jacksonville; Kansas City, MO; Los Angeles; Miami; Philadelphia; Salt Lake City; San Francisco; Santiago; and Quito.
www.theinstantgroup.com