Quick Facts from the Coworking Space Industry
By Shahar Alster
Chief Executive Officer & Co-Founder
The coworking space industry is growing by leaps and bounds. A growing remote workforce and rise of the gig economy are pushing the demand for workspaces to new heights. It’s not just happening in the United States, either. The coworking trend is a worldwide phenomenon. Wherever people work, there’s coworking.
Though still an emerging industry, coworking has surged over the last decade. In the last few years, coworking has reached the mainstream. Coworking statistics show strong advancements across important metrics, such as total industry growth and demand, customer trends, and profitability.
Look at some of the eye-popping statistics surrounding the coworking boom and what they mean to the future of commercial real estate and the workforce.
A look at industry fundamentals
Fundamentally, the coworking industry is fascinating. It’s a strong departure from the traditional office concepts, yet serves the same role for the people using it. While coworking operates outside the bounds of usual workplace governance, it’s still held to some of the same rules.
Things like the average size of coworking space must correlate to traditional office metrics. Likewise, variables like occupancy and workspace type play a big role in the success or failure of a coworking space. Consider these general industry facts that paint a picture of coworking:
- The global market value of coworking is estimated to be $26 billion in 2019.
- The average size of a coworking space in North America is 9,799 sq./ft.
- The average coworking space has a capacity of 100 people.
- 70% of coworking spaces with at least 200 members are profitable.
The growth of coworking
The space-as-a-service business model is growing rapidly. Coworking growth is evident in nearly every relevant metric, including the number of new leases, number of seats, dedicated square footage, and growth rate. Tailwinds propelling coworking growth include the increase in remote workers, rise of gig economy, decentralization of work, and prevalence of startups and small business cultures.
This model originated about a decade ago, but has seen breakneck expansion over the last three to five years. Forecasts show the next few years are likely to see even more emphasis on coworking as the model for adapting work styles.
- Flexible space has grown at an average annual rate of 23% since 2010.
- Coworking spaces account for ~30% of new total U.S. office tenants since 2017.
- The total number of global coworking spaces is expected to reach ~50,000 by 2020.
- By 2022, more than 1.08 million people will use coworking spaces regularly.
Coworking’s social impact
The rise of coworking hasn’t strictly been a benefit to commercial real estate. There are also rippling social advantages to coworking. As businesses shift away from traditional office concepts, many people miss working alongside peers. Coworking allows for more contact with other professionals from different backgrounds.
Many coworkers use these unique workplaces to increase their social and professional circles. Others see coworking as a lead-generation opportunity. Partnerships form and referrals mount. Coworking is as much a professional networking opportunity as a space to get work done.
- 82% of members say coworking has expanded their professional network.
- 64% of members can trace a referral or business opportunity to a coworking connection.
- 89% of people say they’re happier while working after joining a coworking space.
Global coworking stats
How big is the coworking market? Though difficult to quantify, coworking appears to be a part of a broader, global paradigm shift. In major global metropolitan areas, coworking is fueling massive property grabs and changing the work habits of urban professionals.
Coworking is poised for continued growth in the United States, Great Britain, Asia-Pacific, and other hubs. On a global scale:
- Coworking spaces account for almost 10% of space leased in Manhattan.
- Flexible workspaces represent as much as 7% of London’s commercial real estate.
- Asia-Pacific has roughly double the number of coworking spaces as the U.S. and U.K.
Coworking is the new way to work
The perfect storm of rising real estate costs and a cloud-enabled workforce set the stage for the space-as-a-service business model. Now, coworking isn’t just here to stay—it’s here to thrive. Demand for coworking spaces will likely increase in the coming years. As remote workers realize the benefits of coworking, so too will the companies that employ them. Coworking as a business model stands to benefit as the solution to new-age workspace demands.
Keep reading: Why coworking space in the modern workplace?