Demand For Flexible Workspace Begins To Tick Up Despite A Down Year For Chicago
A new Chicago-based study indicates that after a drop-off in demand for flexible workspace earlier this year, larger users — those needing 25 or more desks — are expressing renewed interest in coworking, serviced and hybrid office spaces.
Amid the great reshuffling surrounding hybrid work and the return to the office, demand for flexible workspace in the Chicago metro was forecast to be down 14% between 2021 and 2022, per findings provided to Bisnow from The Instant Group, which bills itself as the largest global marketplace for flexible workspace, with clients like Prudential, Booking.com and Shell.
But Chicagoland demand is on an upward trajectory in the second half of the year. The second half of 2022 has so far outpaced the second half of 2021 by 5%, which The Instant Group said has been driven by larger companies attempting to offer more elastic working conditions.
Inquiries, or inbound requests for workspace, for zero to two desks is down 24%, the Instant Group said, as workers find they can work from home or migrate to satellite offices for an easier commute. But inquiries for three to nine desks increased 25%, inquiries for 10 to 25 desks leapt 16%, and inquiries for 25 or more desks increased most of all at 33%.
“While the 0-2 workstation requirements have been down in Chicago’s CBD, the exciting thing here is the increasing inquiries for 3+ workstations,” Director of Digital Solutions Brian Childers said in a release. “We are seeing the 0-2 workstation clients are finding they can work from home just as effectively as being in an office, while the 3+ workstation clients are needing the cross-team collaboration time.”
The study found that despite fluctuating demand, flexible office supply is up 5% year-over-year. Workstation rents are stable at an average cost of $532 per desk, up just $1 a desk over last year.
The Chicago uptick comes as companies step up coworking expansions nationally. WeWork's occupancy reached 72% across its real estate portfolio of more than 700 global locations, according to the company’s second-quarter earnings report. Meanwhile, JLL’s 2022 The Future of Work Survey showed 43% of real estate decision-makers said they planned to accelerate investment in flexible space over the next three years.
“Companies wanting to give employees more flexible options that don't require them to commit to a full office return is one of the factors driving demand,” The Instant Group Chief Client Officer Emily Watkins told Bisnow. “Companies are evaluating their current office utilization to determine how much space they will need. Leveraging flexible office spaces enables organizations to flex up and down as needed.”
CORRECTION, NOV. 2, 12:15 P.M. CT: A previous version of this story inaccurately stated the number of global WeWork locations. The story has been updated.
