Office space rentals continue to boom and coworking spaces are no exception. 3.7 million employees in the US now work from home at least half the time, according to the recent American Community Survey conducted by US Census Bureau. What's more, 80 - 90% of the US workforce said that they would like to work remotely at least part of the time. As the number of people working remotely rises so to does demand for office space to accommodate them. Demand for office space is now at it's highest since the pre-reccession levels of 2006.


In the fourth quarter of 2015, 21.3 million square feet of commercial real estate were absorbed by the market, according to a report by Cushman & Wakefield. This matches peaks last achieved before the 2006 recession. The Bay Area has been a particular hotspot for office leasing. Office deals accounted in Bay Area accounted for 11% of the total deals in the United States as a whole.

The demand for office space is being driven primarily by one factor - job growth. 210,000 jobs were added in the last quarter of 2015 and all of those new employees need somewhere to work. Lacking office space to accommodate those employees many companies have been looking at more innovative solutions like remote working. And as the American Community Survey study above indicates this is popular solution not only with employers but with workers as well.

Moving workers outside of the confines of the main office may not necessarily alleviate demand for office space. While some of the growing number of remote workers choose to work from home, a significant number are instead choosing alternative working spaces like coworking hubs and "rent-a-desk" solutions working along side other companies.

Coworking hubs provide flexible work space for start-ups, freelancers and even traditional companies. One of the advantages of co-working hubs for larger corporates is that they allow employees to work from wherever a “hot-desk” may be available. They can also act as an “over-flow” solution if a particular office can not accommodate new team members.

The maturation of start-ups inside of co-working hubs is also impacting the demand for office space.

Many start-ups which a few years ago may have consisted of only one or two employees, are growing beyond the confines of co-working spaces and now require dedicated office space. Popular social impact co-working space Impact Hub notes that in 2012 only 43% of it's members were defined as mature companies. But by 2015 that number had risen to 74% of it's members. Redesigning existing co-working spaces can help alleviate this problem by accommodating more workers. But at some point at these start-ups grow into larger enterprises dedicated office space is needed. While this growth arc is nothing new, the number of start-ups growing into larger businesses is rising.

In the past it was believed rising number of remote workers would reduce demands on commercial office space. In fact the shift towards flexible working does not appear to limiting the need for office space, but in fact may be helping to contribute to it's demand. In particular, as start-ups incubated in co-working environments mature, there is even greater need for room to house their growing number of employees.


This article is brought to you by The Crash Labs, a coworking space based out of Orange County, California. We offer a professional working space without the need for long-term contracts or leases. For more information visit our website at www.thecrashlabs.com.