DFW Bolts Past NYC In Number Of Coworking Spaces As Satellite Office Trend Spreads
Dallas-Fort Worth surpassed Manhattan to take second place in the nation for number of coworking spaces as the working world continues to decentralize and follow employees into the suburbs.
It is the first time the Metroplex has placed that high on the Coworking Industry Report compiled by CoworkingCafe, part of California-based property management software company Yardi Systems. DFW ended the second quarter with 271 coworking spaces, posting growth of 5% over that time.
It fell just behind front-runner Los Angeles, which grew by 3% in the quarter to 279 spaces. Manhattan added just one coworking location in Q2 and ended June with 264 spaces, though it is still tops in the nation by square footage at 11.9M SF. DFW rang in fifth by that measure with 5.37M SF.
Yardi Matrix Manager of Business Intelligence Doug Ressler attributed the rise in DFW coworking spaces to the region’s economic growth, population increases, business-friendly environment and the general shift toward hybrid working models for many companies.
“People want to be able to have not a permanent site, per se, but maybe a Tuesday, Wednesday, Thursday site,” Ressler told Bisnow. “At the same time, they also would like it close to where their employees live.”
As traditional office spaces go underutilized, Ressler said coworking spaces are becoming satellite offices for major employers.
The new Venture X Allen-Fairview location in the Fairview Town Center development was one of the new spaces that helped move DFW up the ranking. Owner Nadim Ahmed said he picked the location for his second Venture X location at the Dallas by the Galleria space because the area isn’t yet at its full potential.
“I try to go into markets that are under-tapped,” Ahmed told Bisnow. “You need a good balance with the beautiful, professional office space that has the right vibes, but also, obviously, is affordable.”
The Venture X Allen-Fairview location is cheaper than being in Uptown Dallas or at Legacy West in Plano, where rents can run $50-$60 per SF, Ahmed said.
“It’s hard to match that with the market – with the consumers who are only willing to pay $500 or $600 per office,” he said.
Nationally, DFW had the highest rate increase for open workspaces, rising from an average $150 per desk monthly in Q1 to $198 per month at the end of June, according to the CoworkingCafe report. Over that same time frame, the national average dropped $1 to $149 per month.
Coworking space provider Industrious has three DFW locations, with two in Dallas and one in Plano. Of the three, Regional Director Kelsey Emery said the Plano location has the highest occupancy rate and collects the highest rents.
“We actually can charge a premium in Plano versus in Dallas proper,” Emery said to Bisnow. “Plano is a very high-end suburb where a lot of people live, and they don't want to drive into Dallas. They'll pay more to be close to home.”
Future Of Coworking In DFW
DFW office buildings are generally newer than those found in markets like New York City or Atlanta, which allows for more flexibility with design for coworking spaces, Ressler noted. Between that and the region's economic and population growth, he said it is possible the Metroplex could overtake Los Angeles in total number of coworking spaces.
“The Dallas-Fort Worth Metroplex has grown because of the inbound migration and ... they're also building quite an extensive tech community,” Ressler said. “LA has a much more diverse culture, but they also have a lot of cons associated with that, like high tax base, which obviously Texas doesn't have.”
Emery said Industrious' application volume has increased in DFW and the company is looking for opportunities to add additional locations in the Metroplex.
“A lot of people are moving to Texas and opening their satellite offices,” she said. “We're able to see growth from companies who need satellites or extra space for their teams.”
Still, the additional population isn't enough to create a need for new coworking locations. Ahmed said that despite rapid expansions in far-north suburbs like Prosper, Anna and Melissa, it usually takes about 10 years after a housing boom for an area to support a coworking space.
“There's some untapped areas in Fort Worth that can be done,” he said of potential areas he’s looking at for new Venture X locations. “Five to 10 years down the line, downtown will be there, obviously Prosper, and more in Fort Worth.”
