Co-working companies have stepped up their game in New York City, increasingly competing with traditional commercial landlords for the same tenants.
Sixteen co-working companies have leased 664,000 square feet in the city so far in 2018, David Falk, tri-state chairman of Newmark Knight Frank, told the New York Post. WeWork is inching closer to 3 million square feet, making it the second largest occupier of space in the city after JPMorgan Chase.
“Co-working is trying to scale very fast to be more competitive,” said Peter Turchin, vice chairman of CBRE.
Morris Levy, co-founder of the Yard, said companies are able to save 30 to 40 percent per person at a co-working space compared to a traditional office. At co-working spaces, companies aren’t paying for common areas, internet, certain insurance and buildouts.
Previously, co-working companies were primarily competing for small, leftover space in buildings, but that’s no longer the case. The average co-working site five years ago was less than 30,000 square feet, but companies are now taking 70,000 to 150,000 square feet. Jay Suites just net leased all of 15 West 38th Street — a 90,000-square-foot building — for its ninth location.
“Co-working sites have leased a lot of space, but now they are starting the enterprise model and going after tenants,” Falk said. “Landlords haven’t really felt the competition, but it’s present and more prevalent.” [NYP] — Kathryn Brenzel