The real estate market in Manhattan saw a robust 20.9% market share in Q1. This put them squarely in second place behind the domineering financial services sector, which accounted for 29%. TAMI (technology, advertising, media, and info) was bumped to third. What was responsible for real estate’s big jump? Coworking firms account for a whopping 98.8% of all leases signed. Coworking has been surging since 2014 but this is the most drastic impact it’s had on leasing yet. That impact is finding its way to other boroughs like Brooklyn as well.
Why Is Coworking So Popular?
Coworking first became popular in 2014, and that popularity has been growing ever since. Startups and entrepreneurs like how it allows them to have a professional working space without having to invest in any furniture or equipment and how it lets them easily network with like-minded individuals.
Another reason why it’s so popular is that more and more people are rebelling against the traditional 9-5 work day. Coworking spaces are generally open 24/7 so people can work on their own schedules based on when they are the most productive, not on someone else’s. That freedom is very attractive to a majority of workers. According to Office Vibe, 70% of the working population prefers to work outside of traditional working hours. This is the new normal.
Working Alone with Others
Michigan’s Ross School of Business interviewed over 200 people who lease coworking spaces around the world and found that most people enjoy working alongside others. That is, they like being around other people while working on their own. They generally disliked working in formal offices or completely alone.
It’s estimated that by the year 2022 there will be over 5 million coworking people in over 30,000 spaces. The trend is growing faster by the minute. Big companies like IBM, Barclays, Microsoft, and Verizon are jumping on the bandwagon too, eschewing traditional big offices for coworking leases instead. Asia/Pacific and India lead the world in coworking spaces with 3,975. The United States (3,205) and Europe (3,070) round out the top three.
Specialized or niche spaces are rapidly expanding as well. Large coworking spaces have their place and will always be in demand, but smaller spaces are also growing in popularity. These are spaces for specific interest groups (writer’s spaces, women’s spaces, industry-specific spaces and so forth) and for people who are not attracted to a traditional kind of co-working space.
Coworking is changing the way the world works and will continue to do so for many years to come. Coworking spaces could well be the answer to filling the vast amounts of empty commercial space that can be found in big cities like New York and Detroit, where traditional retail is fading fast. One thing is certain; it will continue to make its mark in the real estate market for many years to come.