Past its prime? Co-working may be maxing out in Manhattan: report

The city could see 10M sf of shared-office space by the end of next year

New York /
Jul.July 17, 2018 07:00 AM

A coworking space with a brick wall (Credit: iStock and Wikipedia)

The co-working craze may soon hit its peak in Manhattan.

A Savills Studley report said the growing business — dominated by players like WeWork and Knotel — is poised to hit a wall in the next couple years, Bloomberg reported.

“The market is getting more fragmented as some hybrid models and different providers get into the space,” Keith DeCoster, the firm’s director of U.S. real estate analytics, told the publication. “Many shared-office-space providers are already starting to direct their attention to other markets that are not as saturated, such as Denver, Charlotte, Miami and Atlanta.”

In New York, co-working companies have already started offering concessions, such as no-rent periods, the report said. While there’s a similar trend in San Francisco, the premium for space in the city makes it more difficult for companies to scale up.

Manhattan has 6.6 million square feet dedicated to co-working, as of early July, according to Savills. That could grow to 10 million square feet by the end of next year, before potentially slipping back.

That’s still not stopping some shared-office space providers from growing. WeWork is reportedly seeking to raise money at a $35 billion valuation. In April, the company sold $700 million in bonds. The startup doubled its revenue last year to $886 million, as it fends off competition from peers like Knotel. [Bloomberg] — Meenal Vamburkar


Related Articles

arrow_forward_ios
From left: McSam Hotel Group's Sam Chang and SL Green's Marc Holliday with 711 Seventh Avenue  (Getty, Google Mpas, SL Green)
Times Square hotel developer sues neighbors over delayed demolition
Times Square hotel developer sues neighbors over delayed demolition
Napa Valley hot-air-balloon business lists for $12M
Napa Valley hot-air-balloon business lists for $12M
Napa Valley hot-air-balloon business lists for $12M
A photo illustration of the proposed Lower Platte River Corridor (Getty, Plan Preserve Play NE)
Nebraska lawmakers mull digging $1B recreation lake
Nebraska lawmakers mull digging $1B recreation lake
Illustration of Stefan Soloviev (HaydenSoloviev, CC BY-SA 4.0, via Wikimedia Commons, Getty)
Soloviev bets long-dormant Midtown East site in casino sweepstakes
Soloviev bets long-dormant Midtown East site in casino sweepstakes
CHIP's Jay Martin and HCR Commissioner RuthAnne Visnauskas (Getty)
Lies, damn lies, and statistics: Did rent-stabilized vacancies really fall?
Lies, damn lies, and statistics: Did rent-stabilized vacancies really fall?
PulteGroup's Ryan R. Marshall and RedFin's Glenn Kelman (PulteGroup, RedFin, Getty)
Wall Street is bidding up housing stocks again
Wall Street is bidding up housing stocks again
Empire Capital Holdings' Josh Rahmani, Hakimian Capital's Michael Hakimian, RXR's Scott Rechler and 1330 6th Avenue (Getty, Hakimian Capital, Empire Capital Holdings, 1330aofa.com)
Empire Capital, partners close on $320M deal for 1330 Sixth Ave
Empire Capital, partners close on $320M deal for 1330 Sixth Ave
Urban Commons' Salvatore G. Takoushian with Wagner at the Battery
Urban Commons puts FiDi hotel into bankruptcy
Urban Commons puts FiDi hotel into bankruptcy
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...