North America Flexible Office Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022-2027)

North America Flexible Office Market is Segmented By Type (Private offices, co-working space, and Virtual offices), By End User (IT and Telecommunications, Media and Entertainment, Retail and consumer goods), and By Geography (United States, Canada, Mexico, and Rest of North America). The report offers market size and forecast for North America Flexible Office Market in Value (USD Billion) for all above segments.

Market Snapshot

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Study Period: 2018-2027
Base Year: 2021
CAGR: 12 %

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Market Overview

North America Flexible Office Market is expected to grow at a CAGR of 12% during the forecast period. Factors such as the rising number of business entities worldwide, coupled with the expanding e-commerce industry, are anticipated to drive market growth. Moreover, growing trends of 'Space-as-a-Service' and the rising costs of commercial spaces in major metropolitan cities are further projected to drive the market growth.

Due to COVID-19, demand for flexible office space has fallen off this year as more people are working remotely and are reluctant to return to office settings due to health concerns. However, the pipeline for future leasing activity is encouraging, especially from enterprise tenants— traditional corporate office users as opposed to just startup companies and entrepreneurs.

Like the overall office market, demand for flexible office space has been challenged in the near term. The long-term outlook is positive when tenants return to the workplace. Landlords and flex providers are working together in a more transparent way this year to support their viability during the COVID-19 induced market downturn. These relationships are increasingly moving toward partnership agreements and away from traditional lease structures.

In North America flexible office providers are evolving their business models to meet current and future demand. Interest is growing in subscription-based models that support a more distributed network of people and suite offerings to promote privacy over the community. Building owners are increasingly offering their own flexible office options in the form of owneroperated space or pre-built suites, sometimes using flexible office providers to operate the space on their behalf.

Scope of the Report

Flexible office space is a type of workspace designed to provide employees with a variety of different places and ways to work. Unlike traditional offices with fixed and assigned desk positions, workers in a flexible office space can choose the area of the office that best suits the type of work they need to do at that moment.North America Flexible Office Market is Segmented By Type (Private offices, co-working space, and Virtual offices), By End User (IT and Telecommunications, Media and Entertainment, Retail and consumer goods), and By Geography (United States, Canada, Mexico, and Rest of North America). The report offers market size and forecast for North America Flexible Office Market in Value (USD Billion) for all above segments.

By Type
Private offices
Co-working space
Virtual offices
By End User
IT and Telecommunications
Media and Entertainment
Retail and consumer goods
By Geography
United States
Canada
Mexico
Rest of North America

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Key Market Trends

Increase in Office Space Vacancy Rate

In the United States, vacancy rates across the office sector increased to an average of 12.4 percent in the third quarter of 2021. The jump in 2020 is primarily due to the impact of the coronavirus. The COVID-19 pandemic has changed the way that companies operate, and working from home has become the new normal for many employees in the United States. For teams that have returned to the office, employees are being encouraged to stagger start times and alternate their work schedules.

Over a year and a half after the beginning of the coronavirus (COVID-19) pandemic, the office real estate leasing market in the United States is suffering the consequences. As of the second quarter of 2021, all major office markets across the country saw negative office space absorption. In Los Angeles office space absorption measured negative 34,700 square feet, while in Manhattan it was over 3.2 million square feet. Due to the outbreak of the COVID-19 pandemic, employees and employers are preferring work from home option as well as flexible working hours. This statistic shows the vacancy rate in large office metropolitan areas in the United States in the second quarter of 2021. Dallas, Texas had the highest vacancy rate at 28.8 percent.

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Increase in Office Space Construction

The pandemic-induced downturn that some feared would severely impact the flexible office space sector has instead landed flex space a prime role in future office strategies. The growing significance of digital systems & the need for completing knowledge-intensive tasks has transformed into a surging desire among employees to work from the office or from the desired location in an independent way. This has offered firms a chance to utilize their office space more proficiently, reduce traveling hours of employees, and increase employee satisfaction, thereby boosting their work efficiency and productivity. 

The supply of new office space varied greatly among selected metropolitan areas in the United States in the second quarter of 2021. Manhattan, New York, was the leading metropolitan area with the most office space under construction of about 22.9 million square feet. San Francisco Bay Area ranked second with over 5.8 million square feet under construction which was only about 25 percent of the new supply in Manhattan. During the same period, the absorption rates for office space in these metropolitan areas were negative. In the second quarter of 2021, the Northeast region had the most office space under construction in the United States. There were over 33.2 million square feet of office space under construction in the Northeast region at the time. The Midwest had the least amount of new office space under construction of about eight million square feet.

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Competitive Landscape

North America Flexible Office Market is fragmented with many players present in the market. Some companies are seeking out larger flexible office suites and enterprise offerings—entire sections or floorplans dedicated to individual companies on flex terms. These companies are responding to the strong desire of employees to retain a significant level of flexibility in how and where they work in a post-pandemic world. Flex office providers have made their offerings more attractive with on-demand and desk-pass services, which allow people to use their services whenever needed.

Recent Development

February 2022: TriNet, a leading provider of comprehensive human resources (HR) solutions for small and medium-sized businesses (SMBs), announced an exclusive partnership with WeWork, a leading flexible space provider, to become the company’s professional employer organization partner (PEO) in United States. 

March 2022: WeWork a leading flexible space provider, announced that it is expanding its WeWork Growth Campus program nationally and committing an additional USD 35 million in space for startups and nonprofits in four cities across United States.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

    1. 2.1 Analysis Methodology

    2. 2.2 Research Phases

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Current Market Scenario

    2. 4.2 Technological Trends

    3. 4.3 Industry Value Chain Analysis

    4. 4.4 Government Regulations and Initiatives

    5. 4.5 Insights on Flexible Office Rents

    6. 4.6 Insights on Flexible Office Space Planning

    7. 4.7 Impact of COVID-19 on the Market

  5. 5. MARKET DYNAMICS

    1. 5.1 Drivers

    2. 5.2 Restraints

    3. 5.3 Opportunities

    4. 5.4 Industry Attractiveness - Porter's Five Forces Analysis

      1. 5.4.1 Bargaining Power of Suppliers

      2. 5.4.2 Bargaining Power of Consumers / Buyers

      3. 5.4.3 Threat of New Entrants

      4. 5.4.4 Threat of Substitute Products

      5. 5.4.5 Intensity of Competitive Rivalry

  6. 6. MARKET SEGMENTATION (Market Size By Value)

    1. 6.1 By Type

      1. 6.1.1 Private offices

      2. 6.1.2 Co-working space

      3. 6.1.3 Virtual offices

    2. 6.2 By End User

      1. 6.2.1 IT and Telecommunications

      2. 6.2.2 Media and Entertainment

      3. 6.2.3 Retail and consumer goods

    3. 6.3 By Geography

      1. 6.3.1 United States

      2. 6.3.2 Canada

      3. 6.3.3 Mexico

      4. 6.3.4 Rest of North America

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Overview (Market Concentration and Major Players)

    2. 7.2 Company Profiles

      1. 7.2.1 Regus Corporation

      2. 7.2.2 Knotel Inc.

      3. 7.2.3 Servcorp

      4. 7.2.4 Wework Inc.

      5. 7.2.5 Serendipity Labs

      6. 7.2.6 Venture X

      7. 7.2.7 Proximity Space

      8. 7.2.8 Green Desk

      9. 7.2.9 Industrious Office

      10. 7.2.10 Office Freedom*

    3. *List Not Exhaustive
  8. 8. FUTURE OF THE MARKET

  9. 9. APPENDIX

**Subject to Availability

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Frequently Asked Questions

The North America Flexible Office Market market is studied from 2018 - 2027.

The North America Flexible Office Market is growing at a CAGR of 12% over the next 5 years.

Regus Corporation, Knotel, Inc., Servcorp, Wework Inc., Serendipity Labs are the major companies operating in North America Flexible Office Market .

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