In spite of its growing number of competitors, WeWork has increased its New York City footprint by 6,258 percent since opening its first location six years ago, according to a new report from commercial real estate firm Newmark Grubb Knight Frank.
In its June 2016 NYC NewTrends report, NGKF said that WeWork’s growth has influenced the business model of its competitors. “WeWork has… fueled growth in the average size of locations. In 2016, the provider’s new locations averaged 90,560 square feet, up 204% since 2010-2011. All other providers, including those new to New York since 2010, have consistently opened spaces around 20,000 square feet per new location,” the study read.
WeWork’s trajectory started when it opened its first location at 349 Fifth Avenue in 2010. Since then, its 42,604 s/f footprint has grown to 2,709,006 s/f across 32 locations. The company has managed to do this in spite of an influx of new players in the market. Between 2009 and 2016, 44 new co-working space providers opened in New York City. Before that period, there were only 9 shared workspace firms in New York City spread out between 25 locations.
WeWork remains the biggest co-working firm in the city. The company currently has 3,039,062 s/f in its portfolio, more than twice the 1,445,649 s/f of rival Regus. Other firms in the top five are green desk (422,388 s/f), Cowork|rs (214,493 s/f) and Coalition (167,999 s/f).
Before the “boom years” of co-working firms, the concept was mostly limited to executive suites in Midtown. Now, the model is flourishing in other parts of the city. According to the report, the greatest concentration of shared workspaces is in Downtown East, with 16.5 percent of co-working options located in the area. A close second is Brooklyn, which has 15.7 percent.
The report offers a rosy prediction for co-working growth in New York City, something that NGKF based on the sector’s performance during the downturn. “Co-working is nimble. The current model grew out of the last recession, indicating that key providers know how to navigate a downturn,” the report read.
“As with any other segment of the market, a down cycle may cause a decrease in the number of co-working providers or location. Nevertheless, co-working is likely to become a permanent part of the infrastructure of commercial real estate in New York.”
WeWork is currently in expansion mode. The company has more than 200,000 s/f in the pipeline in locations such as Dock72 in the Brooklyn Navy Yard.