Signature’s Tampa coworking space trends show that multiple companies are currently in the process of preparing their post-COVID-19 return-to-work policies.
Every major media outlet is abuzz with speculation about coworking trends and future work. Everyone has a view of the current office market. Is the office market going to recover? Are these coworking trends a catalyst for Signature’s growth and capture? The coworking and flexible office segment is growing from 5% to 30% of the total office market by 2030. As you can see from Signature Workspace’s Office Pro Tampa Coworking Trends data, coworking is helping the market recover from the downturn.
The COVID-19 epidemic proved coworking and flexible offices were just that, flexible. Many coworking operators were desperate to find members after tenants moved out of short-term spaces quickly. This resulted in more than 700 closings within the last 15 months, which is more than 21% for all locations. Many, including us at Upsuite speculate that coworking will lead the office market to recover from the recession. COVID-19 vaccines have been a boon for workers and businesses.
Is it possible? Early returns suggest yes. Continue reading to learn more about what we know and how recovery looks from past Tampa coworking space trends and coworking space trends all over the U.S.
- The demand is back. From Q1 to Q2 2021, the coworking demand per location grew by an astonishing 41%
According to Signature’s data from Signature Workspace’s Office Pro, Tampa Coworking space trends/ Coworking Space Trends, and Insights Platform, the demand per location increased 41% between Q1 2021 and Q2 2021. Furthermore, the demand per location is almost 10% higher than in Q1 2020 due to the pandemic.
- Large North American markets seek growth faster than 41%
Although not all markets Upsuite tracks had such strong growth, cities like New York City (83%), Los Angeles (79%), Florida (72%), and Denver (63%) showed above-average demand growth.
- In other markets, growth is slow
Although demand growth was strong overall, not all markets saw a complete recovery in Q2. Canadian markets like Toronto, Montreal, and Calgary saw their demand decline as delayed vaccinations were caused by delays.
Additionally, demand growth was below average for some northern cities like Minneapolis, Chicago, Florida, or Detroit.
- Tenants are just beginning to express their preferences in real estate choices
There are many predictions about the future work environment. There are many predictions about the future of work, from The Great Departure to You Will Like to Return to Work Eventually. These all fuel demand for flexible offices. Companies are reluctant to commit to long-term space because of uncertainty. Employers are discovering that the preference for working from home is limited to one-third (McKinsey), and two-thirds (FlexJobs), respectively. This means that a hybrid office or flexible office is the future.
- The Recovery has not yet hit operators’ balance sheets: Many coworking and flexible office providers are still cash poor.
The vacancy rate in the flexible and co-working sector is high despite increasing demand. Denver, for instance, saw a drop in vacancy from 34% in Q1 and 32% in Q2 despite increased demand. Many coworking businesses report that 70% to 80% occupancy is necessary to generate positive cash flow.
While vacancy rates are high, average prices have fallen. The average seat price in markets such as Washington, DC fell from $422 per month (pre-pandemic peak) to just over $280 per month. Low prices, combined with high vacancy, are also hurting bottom lines. Closures in the coworking industry continue to outpace openings. As in many markets, in the Tampa Bay Area, there were more flexible and coworking office closings than Q2 openings.
- In Q3, there will be as many coworking and flexible openings as closures
We believe that Q3 will be the end of North American coworking and flexible supply. There were more closings than openings in Q2, and this trend will continue as demand for flexible work increases. The majority of closed coworking spaces will still be used as coworking, rather than being converted to traditional offices.
- In most markets, average seat prices will rise
We are anticipating that average seat prices in most markets will rise in Q3, which is good news for operators and bad news for occupiers. Except for late-recovering markets such as Canada, operators will have the ability to use lower vacancies to request higher seat prices from their members. Price increases may be held back by factors such as the availability of sublease space.
- More building owners will decide the role they want to play in the flexible market
A shift in players will be triggered by the pandemic. Many building owners will create a new normal for flexible workspaces, often out of necessity, as they already have unoccupied coworking spaces.
Signature Workspace, owned and operated by Cantor Fund Management, offers services and amenities such as private/ traditional/ studio offices, virtual offices, meeting/conference rooms, and more. Locations ranging from, offices in Tampa on Dale Mabry and Northdale and one office in Clearwater offer great physical office space amenities. Contact Signature Workspace for more information today!