Massachusetts and Colorado are most expensive states in the U.S. for flexible workspace, while San Jose has largest growth in average monthly desk rate pricing in 2017, according to The Instant Group's Annual U.S. Market Summary
Research finds New York, California and Texas outpace the rest of the U.S. in flexible workspace growth
NEW YORK, May 10, 2018 /PRNewswire/ -- The Instant Group, which places more than 7,000 companies a year in flexible workspace and works with occupiers and operators to create bespoke space, has released its U.S. Market Summary, analyzing flexible workspace growth across the country in 2017. Flexible workspace includes co-working, serviced and hybrid office locations.
State by State; City by City
The most expensive states for flexible workspace are Colorado and Massachusetts, with average monthly desk rates at $1,250 and $1,213, respectively. New York State retains a strong average desk rate of $1,063, which is a slight decrease on 2016, due to the distribution of additional centers across the state with lower prices outside of Manhattan.
While growth has been dynamic across the country, the top three states – New York, California and Texas – are still growing faster than the rest of the U.S., and the top five states comprise 51 percent of total flexible workspace centers.
The average desk rate across the U.S. was $763 in 2017, up from $747 the prior year. Emerging markets have seen considerable growth in desk rates, with Missouri, Louisiana, and New Hampshire showing growth of between 10-12 percent.
At a city level, Boston and Austin saw a 15 percent and 16 percent growth of centers, respectively, while desk rates remained static as demand failed to catch up with the large increase in supply.
"In the largest markets, we are seeing prices cool a bit, indicating that supply is finally catching up to demand and that centers are opening outside of the central business districts and thus offering lower desk rates," said Michelle Bodick, managing director, sales and marketing (Americas) for The Instant Group.
San Jose has seen the largest growth in average monthly desk rate pricing with a 16 percent increase, shifting the average price up to $908. Boston is the most expensive city with an average monthly desk rate of $1,889.
Total Flexible Workspace in U.S.
There is now an estimated 80 million square feet of flexible space in the U.S., compared to 50 to 60 million square feet in the UK, the world's second largest market.
The average size of center changes according to its profile – serviced offices average 19,000 square feet, hybrid offices that combine both co-working and private offices average 22,000 square feet, and co-working spaces average 10,000 square feet.
Independent Operators
Instant's findings show that while the top 10 operators account for 34 percent of the market; over 93 percent are independent, or "indie" operators.
"Indie operators far outweigh the industry giants in the U.S. right now, running more than half of all centers in the U.S., and are the ones following the nichification trend catering to specific audiences in the flexible workspace market," said Bodick.
Length of Deals
In 2017, The Instant Group's data showed that more than a third of all deals across the U.S. flexible workspace market have been for 12-18 months.
Portfolio deals for 12 or more months are up 10 percent over the last year, as corporate occupiers increase their take-up of flexible space, another significant trend in the flexible workspace market.
At the other end of the market, there was growth of month-to-month rolling deals over the last 12 months as operators became more comfortable with occupiers taking super-flex deals.
To view the full report, please click here.
About The Instant Group
Founded in 1999, The Instant Group is a workspace innovation company that rethinks workspace on behalf of its clients injecting flexibility, reducing cost and driving enterprise performance. Instant places more than 7,000 companies a year in flexible workspace such as serviced, managed or co-working offices including Amazon, American Express, Sky, Network Rail, Serco, Teleperformance, Worldpay, and TMF making it the market leader in flexible workspace.
Its listings' platform Instant Offices hosts more than 12,000 flexible workspace centers across the world and is the only site of its kind to represent the global market, providing a service to FTSE 100, Fortune 500, and SME clients. With offices in London, Newcastle, Berlin, Dallas, New York, San Francisco, Hong Kong, Sydney, Singapore, and Kuala Lumpur, The Instant Group employs 200 experts and has clients in more than 150 countries.
SOURCE The Instant Group
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