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Where Are the Fastest-growing Cities for Coworking Business?

Coworking space operators should look for an experienced franchise consultant for their expansion plans in the last quarter of 2019, as industry forecast revealed the addition of more shared workspaces. Almost 700 new coworking spaces will be available in the U.S. before the year-end. Some of these new flexible offices might be set up in emerging markets across the country. While Chicago, Los Angeles, New York, and other significant cities remain popular, some companies have decided to take their business where competition is a lot more manageable.

Migrating Population

Competition isn’t the only reason why smaller coworking space operators have searched for alternative markets. A growing number of people have been on the move away from city centers to suburban areas, which prompted businesses to explore an untapped market. Over 2.5 million Americans changed their addresses between 2016 and 2017, according to U.S. Census Bureau data. It showed that Austin, Texas; Tampa, Florida; and Raleigh, N.C., were some of the cities with an increase in population during the same period. Cleveland and Pittsburgh are also other cities where the relative increase in suburban residents have led to a bigger demand for shared offices.

Sustainable Growth Despite Competition

Even large companies like WeWork have turned their focus on smaller markets such as Kansas City in Kansas/Missouri, Minneapolis in Minnesota, and Nashville in Tennessee. However, the entry of dominant players in second- or third-tier cities doesn’t spell doom for small coworking space operators. A lot of those who moved into a different town prefer personalized service, instead of relying on the popularity of big-name coworking providers. Many of these domestic migrants are also freelancers who are still the most significant market demographic for the coworking industry, not only in the U.S. but also worldwide. Freelancers take up approximately 41% of the global supply, followed by 36% from corporate employees. This indicates traditional companies’ shifting perception of flexible offices to attract younger talent. Unlike older employees, millennial workers generally consider a stimulating and vibrant office environment to be more critical for their productivity.

More Women Work in Flexible Offices

woman working on her laptop Another way to sustain your plans of expanding a coworking space franchise involves marketing to more women. While men still make up more than half of all shared office workers globally, their female counterparts steadily increase in numbers. Women account for at least 44% of flexible workspace users in the world. Most of them are freelancers as well. The increasing percentage of female employees also can be attributed to the changing dynamic among U.S. households. More women have taken a bigger responsibility of being the head of the family either because of single parenthood or earning more than their spouses. Don’t plan to expand your coworking space franchise without doing your due diligence. While this article cited several emerging markets for shared offices in the U.S., the actual growth projection for your business will vary based on your target tenant base. It’s easier to map out a strategy by talking to a franchise consultant to know the best option.
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