A new report from The Instant Group, “Beyond the Traditional Office: Trends and Insights in the North American Flexible Workspace Market,” shows that a flexible workspace supply/demand imbalance has created tipping points. for the cities of North America, where New York and Boston, turn out to be the most expensive.
“Demand for meeting room reservations increased by 26% between 2021 and 2022, as collaboration becomes the main objective of the office and workspaces. The average length of contracts in the flexible workspace sector increased by 40% in 2023 compared to before the pandemic, while the average size of occupants increased by 19% during the same period”, says the report of the flexible workspaces data platform.
Cities where demand for flexible workspaces has recovered more slowly, but where new supply is growing, are creating squatter-friendly markets, the study found.
These cities include Denver, Atlanta, and Dallas, presenting an opportunity to acquire flexible space at a competitive price:
“In Denver, demand fell 8%, but supply grew 3%. This oversupply caused rates to drop by 5%,” says The Instant Group. “Demand in Atlanta was up 7% and supply was up 11%. The 1% drop in market rates is due to supply exceeding demand.”
For its part, in Dallas, demand fell 3%, while supply grew 5%. Consequently, rates decreased by 3%.
When looking at Canadian markets, demand is outpacing supply: In Toronto, demand was up 46%, while supply was only up 7%, with rates rising 1%. While in Vancouver, demand increased 95%, while supply growth was 4%, and rates increased 2%. In Montreal, demand increased 67% while supply increased 3%, leading to a 5% increase in rates.
In Mexico City, demand increased 241%, while supply increased 11%, with rates increasing 11%.
All supply and demand data compares the last pre-pandemic year of 2019 with 2022, and tariff data compares the January-April period of 2023 with the same period in 2022.
New York City is the most expensive city in North America for flexible workspaces with an average desk rate of $898 per month. Although the traditional office recovery has been slow in the city, demand for flexible space remained above pre-pandemic levels for the fourth consecutive quarter in the first quarter of 2023, an increase of 11% over a quarter. quarter of 2022, a quarter that fell slightly below pre-pandemic levels.
“Despite some worrying headlines in the traditional office space space in New York City, we are really seeing strength in the New York City flexible workspace market as corporate occupants move in with flexible workspaces to increase agility within their real estate portfolios,” said Michael Calistri, Director of Solution Development at The Instant Group.
For more details on the report, go here.
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