A period of stability? That looks to be what the coworking industry appears to have reached in the third quarter.
According to the third-quarter report from CoworkingCafe, the 25 largest U.S. markets boasted a total of 6,172 coworking spaces as of the end of the third quarter. That is a slight increase of 0.15% from the second quarter of the year when the total number of coworking spaces in these large markets stood at 6,163.
That slower growth is a change. CoworkingCafe reports that the number of coworking spaces in the 25 largest U.S. markets jumped a far larger 10% from the first quarter of 2023 to the second quarter.
According to CoworkingCafe’s report, 13 of the country’s largest markets saw their number of coworking spaces dip in the third quarter when compared to the second. Only Manhattan, though, saw a dip of more than 10%. Raleigh-Durham and Phoenix registered increases of 13% and 11% to help keep the national supply of coworking spaces above second-quarter levels.
The financial problems of WeWork are contributing to the slower growth of coworking spaces across the United States. CoworkingCafe said that the number of WeWork spaces in the top 25 U.S. markets fell from 217 in the second quarter of this year to 180 in the third.
“The WeWork reor is causing some short-term contraction in the overall shared space square footage number, but demand is strong enough that the total number of national locations is up,” said Peter Kolaczynski, director of CommercialEdge, in a written statement. “We expect some volatility in total square footage to continue as those locations find their next use.”
The national median rental rate for a virtual office in the third quarter was $125, down by 12.5% from June when it stood at $143, CoworkingCafe reported.
Washington, D.C. registered the lowest median among all of the 25 top markets, only $80 a month.
At the other end of the spectrum, Chicago and New Jersey stood well above the national median: They were the only two markets to exceed the $200 mark at $205 a month rent each.
The national median rent for open workspaces and dedicated desks in the third quarter stayed the same as in the second quarter, $149 and $329, respectively.
Manhattan registered the highest number of coworking spaces in the top 25 markets in the third quarter, with 270. The Dallas-Fort Worth area came in fourth with 242 coworking spaces, while Chicago was right behind with 230.
The Minneapolis-St. Paul market had 87 coworking spaces as of the end of the third quarter, while Nashville had 74. Austin recorded 71, while Indianapolis came in with 63.
