Given the rapid increase in office vacancies and the continued popularity of remote or hybrid work models, post-pandemic, commercial real estate investors are now turning their attention to coworking spaces as the demand for them rises. Coworking and shared spaces have become crucial for various professional groups, including early-stage small businesses, freelancers, and college students. The appeal of coworking is expanding, from entrepreneurs managing solo operations to large corporations investing in shared workspaces, and even college students are emerging as new users in coworking spaces near their campuses.
According to research by Wealth Management, major coworking providers reported consistent increases in occupancy quarter-over-quarter last year, with some reporting occupancy rates exceeding 70 percent in primary markets. For instance, WeWork saw its occupancy rise to 73 percent in the second quarter of 2022. Andcards, a company specializing in coworking space management software, predicts that the global number of coworking spaces will reach nearly 42,000 by the end of 2024.
Coworking spaces are also gaining popularity among top universities in the United States. A recent market study by Coworking Café highlights how modern students benefit from the availability of coworking spaces, which provide them with a genuine taste of professional office life—an experience that is difficult, if not impossible, to replicate within the confines of a college library or dormitory. Moreover, coworking spaces are becoming increasingly attractive to college students due to the unique opportunity they offer to establish connections by working alongside experienced professionals and entrepreneurs. This presents the potential for students to discover employment opportunities, potential business partners, or clients for their own ventures. The market report includes an analysis of the abundance of coworking spaces located within a two-mile radius of the top 100 universities in the nation.
Nationally, campuses with the most coworking spaces nearby are typically found in densely populated Northeastern cities such as NYC, Boston, and Washington, D.C. However, it is noteworthy that even typical college towns offer a substantial number of flexible workspaces where students can initiate their careers and expand their networks across the country, with nearly every state represented. Therefore, locations outside the Northeastern region also rank prominently.
Notably, the University of North Carolina stands out with eight coworking spaces near its Chapel Hill campus. Similarly, Stanford University in California boasts seven such spaces. Furthermore, Ann Arbor is represented on our list by the University of Michigan, whose campus also has three coworking spaces nearby, matching the count at Ohio State University in Columbus.
The shifting landscape of work dynamics, driven by factors such as the rise in remote and hybrid work models, has presented a compelling case for commercial real estate investors to seriously consider coworking spaces for their future investments. The growing demand for flexible and collaborative work environments, as evidenced by increasing occupancy rates and the proliferation of coworking spaces globally and amongst major universities, underscores the attractiveness of this market.
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