Since the beginning of the COVID-19 pandemic in North America, two competing narratives about return to office have jostled for attention and authenticity. Depending on who you believe, either the traditional office is ready to die, or newer community-styled coworking spaces are set to boom.
We studied foot traffic patterns from June 1 to September 20 2021 for 11 operators of 755 shared office spaces all over the US. The brands we studied are CarrWorkplaces, Galvanize, General Assembly, Industrious, MakeOffices, Regus, Serendipity Labs, Spaces, TechSpace, The Yard and WeWork. Some of these are nation-wide operators, others only own property in a handful of markets.
Some of these brands, e.g. Regus, fall into the mold of a large building serving a handful of enterprise clients in a setting with common amenities or points of access. Others, such as WeWork, are modern, purpose-built coworking spaces-slash-community hubs catering mostly to startups and entrepreneurs. In each case, exposure to lots of people outside of your business but well within your environment is all part of going into the office.
To pull the data for these insights (download the full report here), we used Unacast Now. To visualize it, we built the Tableau workbook below, which includes interactive maps and charts that let you zoom-in and out at the state, city and brand level.
You can follow along in the Tableau workbook as we go -- for ease of use, each section references a specific tab. We’ll begin by reviewing coworking visitation traffic patterns from a national level, before zooming-in to shed light on the most competitive state and city markets, and taking a deep dive on individual brand performance, with particular attention paid to comparing Regus and WeWork’s relative performance.
Total US Coworking visitation
Total foot traffic to coworking locations is net -9.4% since June 2021. After a good start to the summer — 7.05 million visits in June 2021, as compared to 8.05 million in July (a gain of 14%) — traffic fell modestly in August to 7.52 million visits (down about 7%), before collapsing further in September 2021 to 6.38 million visits. Heading into October and Q4 of 2021, the trendline remained negative.
States with Highest Coworking Visitation
The states with the highest rate of coworking space visitation are, in order: California, Texas, New York, Florida, Illinois and Georgia, which together accounted for nearly 4.2 million visits in June 2021. That peaked in July at about 4.7 million, before crashing back to around 3.9 million by September.
Illinois (-12.48%), lost the most coworking visitation traffic of any of the leading states, followed closely by Florida (-12.26%) and Texas (-11.87%). Georgia was down about 9% in the same time period, while California (-.69%) and New York (-.68%) have been mostly flat.
In each case, statewide figures are heavily influenced by the largest city contributor — so NYC is doing better than Chicago, for example — but there are plenty of variations on that rule when you move to smaller markets.
Cities that are gaining Coworking Visitation traffic
While coworking visitation is down on the whole, some areas recorded noticeable growth of foot traffic to shared office spaces between June and September 2021. Smaller cities, including Montgomery, AL, and Aurora, CO are up over 50%. Detroit (+32%) and New Orleans (+20%) are mid-sized cities with noticeable growth against the national trend, while Boston (+4%), Austin (+8%) and Arlington, VA (+11%) also have recorded growth during a time of contraction.
Cities that are losing coworking traffic quickly
Among the cities recording the biggest losses of foot traffic to coworking office spaces are: Washington, DC (-7,400 visits or 11.5%), Tampa (-20,500 visits or 29%), Chicago (-42,500 visits or 13%), Baltimore (-7,800 visits or 22%), Pittsburgh (-17,000 visits or 19%) and Houston (-43,000 visits or 16%).
Regus vs WeWork
The two largest competitors, Regus and WeWork, compete head to head in several battleground markets. Across the key states of California, Florida, Georgia, Illinois, New York and Texas, Regus holds a firm lead. This holds true for most, but not all, big city markets.
WeWork Strongholds: NYC, Boston & Seattle
While out-visited by Regus more than 3:1 on the whole, WeWork manages to outdraw Regus in multiple major markets, including New York City, Boston and Seattle. Whether this is due to a more established area brand, or the proclivities of a more tech-focused clientele, these battleground wins against a much larger and more-established competitor are notable for WeWork
The data is in and the results are clear. As the global pandemic crosses the 18th month mark, Americans are not returning to office environments in the manner that was hoped. Further, there is no broad-scale boom in shared coworking spaces, i.e. WeWork style hubs are not suddenly filling up, though that brand’s loss of foot traffic is less than their peers.
Perhaps work from home truly is the new norm. More and more companies are turning to that option with either limited, occasional in-office time, or the offer of support for those who want the shared work hub experience sometimes.
There is no statistical evidence that a return to office is happening, nor do current trends portend that future.
Total foot traffic to shared workspaces is down both nationally and in every key state we measured. Ditto for visitation patterns in most major cities. A few smaller cities present as outliers to this trend — perhaps a nod to the growth happening in some areas as a result of the exodus from more congested areas.
Either way, the number of properties presenting as growing pales compared to the number where foot traffic is contracting — a clear indication of risk for analysts and investors with these office brands and others in their portfolio.
Property owners and developers must either double-down on their investment to make coworking spaces more attractive and relevant in the long term, or void their portfolio of properties where the data says the out of office trend is likely to be permanent.
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