The Dallas-Fort Worth metroplex ranks as one of the top five markets in the U.S. for its total share of coworking space.
DFW had 231 coworking spaces spanning approximately 4.46 million square feet in the second quarter of 2023, up from 225 spaces across 4.43 million square feet in the previous quarter, according to a recent industry report by CoworkingCafe, a nationwide search website for finding and booking coworking spaces.
“Coworking — which has consistently been on the rise and significantly fueled by the increase in remote and hybrid work — continues its upward trajectory across the U.S.,” noted CoworkingCafe. “With more flexible workspaces opening their doors every day and new operators entering the market, the changes in this industry are notable, even in the span of just a few months.”
Of the top five U.S. markets with the largest supplies of coworking spaces, DFW ranked No.5, landing a 3% increase over the previous quarter but narrowly getting edged out by Chicago, which had three coworking spaces more than DFW.
The report measured three different categories, including the number of coworking spaces, average square footage, and total square footage.
While DFW ranked fifth in the nation for its supply of coworking space, the metroplex only ranked No.20 in terms of average square footage and No. 6 for total square footage, which, the report explains, is a result of a “focus on smaller spaces.”
Like DFW, multiple markets in the south are experiencing similar demand for coworking space, according to Doug Ressler, business intelligence manager at Yardi Matrix.
“The southern states of the US are experiencing some of the highest growth in demand for flexible workspace,” Ressler told The Dallas Express, noting key drivers like “warmer climate, improved lifestyles, and tax breaks.”
“In these markets, demand is far outstripping supply, putting existing supply under pressure. This undersupply of flex is causing rates to rise as they become a sellers’ market,” he explained.
Although Ressler highlighted demand in cities like Miami, Phoenix, and Austin, the report ranked Manhattan, Los Angeles, and Washington D.C. as CoworkingCafe’s respective first, second, and third-ranked markets during the second quarter of 2023.
To determine the current coworking landscape, CoworkingCafe leveraged proprietary data and compared registered numbers to establish the quarterly distribution of coworking space across the nation’s 25 largest markets.
In terms of DFW’s rank compared to other Texas metros, the North Texas metro area had the third-highest average square footage.
According to the report, Austin ranked No.9 with an average of roughly 23,000 square feet, about a 1.85% increase compared to the first quarter.
Houston, on the other hand, ranked No.18 for its average square footage, about a 2% decrease from the previous quarter. Data show that Houston’s market had 20,000 square feet of coworking space in the second quarter, down from 20,420 square feet in the previous quarter.
As far as total square footage, DFW had 4.46 million, Houston had 4.16 million, and Austin had 1.65 million.
“Coworking spaces now offer more strategic options for tenants with less predictable outlooks. This is specifically true in spaces that are being utilized more than the organizations’ core headquarters,” according to the report.
“As a result, landlords in smaller or suburban properties who are interested in the flex market see real opportunity in this niche segment and are beginning to fulfill some of the growing demand for more flexible and agile uses of space,” the report continued.
The top U.S. operators leading the push for coworking space include industry titans Regus, WeWork, Industrious, Spaces, and Premier Workspace, each of which has logged more than 60% of their portfolios in the top 25 markets, the report says.
