Coworking Report Q1: Phoenix Continues Its Growth in Coworking Inventory

(April 18, 2024) — CoWorking Cafe is reporting the U.S. coworking space market constantly evolves and adjusts to consumer preferences, technology breakthroughs, and changing work trends. In this way, coworking spaces are essential for offering creative solutions that satisfy the needs of both individuals and enterprises as the nature of work continues to change, and more focus is placed on flexibility, collaboration, and remote connectivity.

This is why we monitor the development of the coworking industry, as seen through the flex workspace inventory, the square footage attributed to it, coworking prices, and top operators. Accordingly, we examined this data for the first quarter of 2024 and compared it to the previous numbers registered in Q4 of 2023 to determine the industry’s evolution across the top 25 markets in the U.S.

National Coworking Supply Continues Upward Trajectory With Substantial Increases of up to 15% in Salt Lake City

While the national coworking inventory stood at 6,251 at the end of 2023, the first quarter of 2024 registered an impressive 6% growth, translating to 346 more coworking spaces nationwide. This puts the current national supply at 6,597 spaces and demonstrates a constant and positive sector expansion.

Specifically, 20 of the 25 top markets logged more coworking spaces in Q1 of 2024, in some cases by a notable number. For instance, 15% more flex workspaces were added to Salt Lake City’s inventory, putting it at 71 in April, whereas other markets — like Minneapolis-St. Paul and San Diego —increased their coworking supplies by 13% and 12%, respectively, in three months.

Otherwise, only one-fifth of the leading U.S. markets registered declines in coworking spaces, with the steepest one of 8% (10 fewer spaces) in the Bay Area. That said, the remaining four—Manhattan, Washington, D.C., Miami, and Philadelphia—each decreased by a minor 1%.

Rates for Virtual Offices & Open Workspaces Stabilize in Q1 of 2024; Dedicated Desks Go Down in Price

Coworking prices at the beginning of 2024 remained relatively stable, with the only notable change registered in dedicated desks. Similarly, virtual offices maintained the same median national rate as in Q4 of 2023 at $119 monthly. In this case, four of the top 25 markets registered more affordable prices for virtual office subscriptions below the $100 mark. For instance, Dallas-Fort Worth, Denver, and Brooklyn each stood at the median price of $99. And, as seen in previous quarters, Washington, D.C. topped all other markets in affordable virtual offices at only $79 per month — $1 less than in 2023.

Conversely, other markets stood well above the national median, with rates approaching the $200 mark. Namely, a virtual office subscription would set coworkers back $199/month in New Jersey, while the rate for the same type of service stood at $195 in Chicago. Even so, both markets saw price decreases since Q4 of 2023, when they each stood at $205.

Meanwhile, the median rate for open workspaces across the U.S. went up in price by just $1 in Q1 of 2024 as compared to the previous quarter to stand at $150 per month. Yet, despite the minor change in the national rate, the surge in open workspaces was significant in some markets. More precisely, the Manhattan and Brooklyn rates were almost double the national median at $299, after previously standing at $225 and $255, respectively. Moreover, an even larger difference was registered in San Francisco, which reached the same $299 mark for open workspaces. For comparison, at the end of 2023, it rested at $200. Likewise, five other markets almost reached the $200 mark with median monthly rates of $199 — Washington, D.C., Boston, Seattle, Miami and Austin.

At the same time, five other top markets landed at the opposite end of the spectrum with open workspaces that were significantly more affordable than the national median: in Q1 of 2024, the rates for this type of coworking arrangement in Philadelphia stood at $120, while New Jersey, Phoenix, Salt Lake City, and Indianapolis all logged monthly median prices of only $119. In some cases (like Salt Lake City and Indianapolis), the median price has decreased since the end of 2023.

Notably, the national median rate for dedicated desks was the only one to register a notable decrease quarter-over-quarter: although the rate stood at $322 in Q4 of 2023, it dropped to $309 this year with markets such as Indianapolis, Salt Lake City, and even Chicago logging lower prices of $209 (Indianapolis) and $269 (Salt Lake City and Chicago).

However, on the opposite end, some leading markets registered significantly higher prices for dedicated desks. In this respect, Manhattan was the only one to surpass the $500 mark at $510 per month, which was still a $10 drop since the end of last year. Close behind was Brooklyn, which had $455, and San Francisco, which had $450. Two other markets also registered more than $400 subscriptions in this category — Miami and Austin.

Read the full report here.