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

TRD 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 Article

arrow_forward_ios

Embattled Prodigy Network CEO Rodrigo Niño to step down

The Watchtower building at 25 Columbia Heights, CIM Group’s Shaul Kuba (right) and LIVWRK’s Asher Abehsera (Credit: Wikipedia, CIM Group, and LinkedIn)

JPMorgan leads $335M refi for CIM and LIVWRK’s Watchtower renovation

Multifamily market still reigns in Queens, Blackstone balks after rent reforms and more of the biggest CRE trends right now

Real estate titans … and their toys

Developer seeks $40M for Opportunity Zone site in downtown Newark

This East End icon might finally be closing in on a sale

Mack-Cali sells Paramus office property, Murphy enacts land bank reforms & more North Jersey real estate news

Power restored after blackout envelops West Side of Manhattan

arrow_forward_ios