North America Flexible Office Market is expected to grow at a CAGR of 12% during the forecast period. Factors such as the rising number of business entities worldwide, coupled with the expanding e-commerce industry, are anticipated to drive market growth. Moreover, growing trends of 'Space-as-a-Service' and the rising costs of commercial spaces in major metropolitan cities are further projected to drive the market growth.
Due to COVID-19, demand for flexible office space has fallen off this year as more people are working remotely and are reluctant to return to office settings due to health concerns. However, the pipeline for future leasing activity is encouraging, especially from enterprise tenants - traditional corporate office users as opposed to just startup companies and entrepreneurs.
Like the overall office market, demand for flexible office space has been challenged in the near term. The long-term outlook is positive when tenants return to the workplace. Landlords and flex providers are working together in a more transparent way this year to support their viability during the COVID-19 induced market downturn. These relationships are increasingly moving toward partnership agreements and away from traditional lease structures.
In North America flexible office providers are evolving their business models to meet current and future demand. Interest is growing in subscription-based models that support a more distributed network of people and suite offerings to promote privacy over the community. Building owners are increasingly offering their own flexible office options in the form of owneroperated space or pre-built suites, sometimes using flexible office providers to operate the space on their behalf.
In the United States, vacancy rates across the office sector increased to an average of 12.4 percent in the third quarter of 2021. The jump in 2020 is primarily due to the impact of the coronavirus. The COVID-19 pandemic has changed the way that companies operate, and working from home has become the new normal for many employees in the United States. For teams that have returned to the office, employees are being encouraged to stagger start times and alternate their work schedules.
Over a year and a half after the beginning of the coronavirus (COVID-19) pandemic, the office real estate leasing market in the United States is suffering the consequences. As of the second quarter of 2021, all major office markets across the country saw negative office space absorption. In Los Angeles office space absorption measured negative 34,700 square feet, while in Manhattan it was over 3.2 million square feet. Due to the outbreak of the COVID-19 pandemic, employees and employers are preferring work from home option as well as flexible working hours. This statistic shows the vacancy rate in large office metropolitan areas in the United States in the second quarter of 2021. Dallas, Texas had the highest vacancy rate at 28.8 percent.
The pandemic-induced downturn that some feared would severely impact the flexible office space sector has instead landed flex space a prime role in future office strategies. The growing significance of digital systems & the need for completing knowledge-intensive tasks has transformed into a surging desire among employees to work from the office or from the desired location in an independent way. This has offered firms a chance to utilize their office space more proficiently, reduce traveling hours of employees, and increase employee satisfaction, thereby boosting their work efficiency and productivity.
The supply of new office space varied greatly among selected metropolitan areas in the United States in the second quarter of 2021. Manhattan, New York, was the leading metropolitan area with the most office space under construction of about 22.9 million square feet. San Francisco Bay Area ranked second with over 5.8 million square feet under construction which was only about 25 percent of the new supply in Manhattan. During the same period, the absorption rates for office space in these metropolitan areas were negative. In the second quarter of 2021, the Northeast region had the most office space under construction in the United States. There were over 33.2 million square feet of office space under construction in the Northeast region at the time. The Midwest had the least amount of new office space under construction of about eight million square feet.
North America Flexible Office Market is fragmented with many players present in the market. Some companies are seeking out larger flexible office suites and enterprise offerings - entire sections or floorplans dedicated to individual companies on flex terms. These companies are responding to the strong desire of employees to retain a significant level of flexibility in how and where they work in a post-pandemic world. Flex office providers have made their offerings more attractive with on-demand and desk-pass services, which allow people to use their services whenever needed.
This product will be delivered within 2 business days.
Due to COVID-19, demand for flexible office space has fallen off this year as more people are working remotely and are reluctant to return to office settings due to health concerns. However, the pipeline for future leasing activity is encouraging, especially from enterprise tenants - traditional corporate office users as opposed to just startup companies and entrepreneurs.
Like the overall office market, demand for flexible office space has been challenged in the near term. The long-term outlook is positive when tenants return to the workplace. Landlords and flex providers are working together in a more transparent way this year to support their viability during the COVID-19 induced market downturn. These relationships are increasingly moving toward partnership agreements and away from traditional lease structures.
In North America flexible office providers are evolving their business models to meet current and future demand. Interest is growing in subscription-based models that support a more distributed network of people and suite offerings to promote privacy over the community. Building owners are increasingly offering their own flexible office options in the form of owneroperated space or pre-built suites, sometimes using flexible office providers to operate the space on their behalf.
Key Market Trends
Increase in Office Space Vacancy Rate
In the United States, vacancy rates across the office sector increased to an average of 12.4 percent in the third quarter of 2021. The jump in 2020 is primarily due to the impact of the coronavirus. The COVID-19 pandemic has changed the way that companies operate, and working from home has become the new normal for many employees in the United States. For teams that have returned to the office, employees are being encouraged to stagger start times and alternate their work schedules.
Over a year and a half after the beginning of the coronavirus (COVID-19) pandemic, the office real estate leasing market in the United States is suffering the consequences. As of the second quarter of 2021, all major office markets across the country saw negative office space absorption. In Los Angeles office space absorption measured negative 34,700 square feet, while in Manhattan it was over 3.2 million square feet. Due to the outbreak of the COVID-19 pandemic, employees and employers are preferring work from home option as well as flexible working hours. This statistic shows the vacancy rate in large office metropolitan areas in the United States in the second quarter of 2021. Dallas, Texas had the highest vacancy rate at 28.8 percent.
Increase in Office Space Construction
The pandemic-induced downturn that some feared would severely impact the flexible office space sector has instead landed flex space a prime role in future office strategies. The growing significance of digital systems & the need for completing knowledge-intensive tasks has transformed into a surging desire among employees to work from the office or from the desired location in an independent way. This has offered firms a chance to utilize their office space more proficiently, reduce traveling hours of employees, and increase employee satisfaction, thereby boosting their work efficiency and productivity.
The supply of new office space varied greatly among selected metropolitan areas in the United States in the second quarter of 2021. Manhattan, New York, was the leading metropolitan area with the most office space under construction of about 22.9 million square feet. San Francisco Bay Area ranked second with over 5.8 million square feet under construction which was only about 25 percent of the new supply in Manhattan. During the same period, the absorption rates for office space in these metropolitan areas were negative. In the second quarter of 2021, the Northeast region had the most office space under construction in the United States. There were over 33.2 million square feet of office space under construction in the Northeast region at the time. The Midwest had the least amount of new office space under construction of about eight million square feet.
Competitive Landscape
North America Flexible Office Market is fragmented with many players present in the market. Some companies are seeking out larger flexible office suites and enterprise offerings - entire sections or floorplans dedicated to individual companies on flex terms. These companies are responding to the strong desire of employees to retain a significant level of flexibility in how and where they work in a post-pandemic world. Flex office providers have made their offerings more attractive with on-demand and desk-pass services, which allow people to use their services whenever needed.
Additional Benefits:
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
This product will be delivered within 2 business days.
Table of Contents
1 INTRODUCTION
2 RESEARCH METHODOLOGY
4 MARKET INSIGHTS
5 MARKET DYNAMICS
6 MARKET SEGMENTATION (Market Size By Value)
7 COMPETITIVE LANDSCAPE
Companies Mentioned (Partial List)
A selection of companies mentioned in this report includes, but is not limited to:
- Regus Corporation
- Knotel Inc.
- Servcorp
- Wework Inc.
- Serendipity Labs
- Venture X
- Proximity Space
- Green Desk
- Industrious Office
- Office Freedom*
Methodology
LOADING...
