In 2024, the flexible office sector witnessed significant expansion, driven by evolving work preferences and technological advancements. This momentum is expected to persist into 2025, with emerging trends poised to redefine how businesses approach office space. As companies continue to seek adaptable solutions, the demand for flexible offices is set to rise. Here are some of the key trends Cushman & Wakefield is keeping an eye on in 2025 and beyond.
Suburban and tertiary markets will continue to grow—both organically and through mergers and acquisitions.
Based on data published by Coworking Café,1 the U.S. saw a 13% year-over-year (YOY) increase in coworking inventory by square footage as of Q3 2024, with the total number of spaces growing by 22% over the same period. Both suburban and tertiary markets have been a significant part of that growth.
Suburban markets have seen inventory of coworking space increase as hybrid workers choose to work closer to home, in part to avoid lengthy commutes.2 Notably, New Jersey’s inventory of coworking space grew 36% YOY, demonstrating strong demand from one of the major New York suburban markets.
Tertiary markets also saw footprints grow 20%, in aggregate YOY, with Indianapolis and Nashville growing the most at 40% and 35%, respectively. Despite this growth, tertiary markets currently make up just 10% of total coworking inventory, up from 9% in 2023. Secondary markets have the largest share of flexible office space at 47%, up from 45% in 2023. Gateway markets3 saw a drop in share of flexible office space from 45% in 2023 to 43% in 2024.
Providers will continue to make opportunistic plays in 2025, acquiring smaller firms in select markets and adding to their inventory.
The prevalence of hybrid work drives demand for flexible office options.
Despite announcements by major employers calling workers to the office more frequently (up to five days a week in some cases), Cushman & Wakefield’s Experience per Square Foot (XSF)TM research shows that employees want flexibility of both schedule and location. When these choices are limited, engagement and wellbeing suffer. Flexible office will continue to provide occupiers with options for their hybrid workforce.
Implementing more flexible office options into an occupier’s portfolio allows companies to facilitate choice for their employees. Companies with distributed workforces can provide both location and schedule flexibility and improve office attendance organically. Employees are looking for flexibility, as 62% indicate they would rather stay in a job with flexible work options than accept a higher paying position with rigid in-office requirements, according to the Robert Half 2024 Salary Guide.4
Landlords offer flexible office solutions to attract tenants.
Owners are increasingly turning to flexible office solutions to reposition buildings that may be struggling with occupancy. Flexible office strategies used by owners differ, and as many of these strategies evolve, we will see some shifting of players in the sector.
- Portfolio enhancement: Some landlords are implementing flexible office options into their office portfolios. Owners have developed their own brand of flexible office space which offers their tenants increased flexibility as the workplace continues to evolve. Some owners are also leveraging that expertise by selecting partners to operate their flexible office offerings.
- Landlord managed: Offering self-managed, flexible office space is an attractive option for some owners looking to enhance their building offerings. The ability to provide a wider range of office options to prospective tenants gives owners a wider pool of potential tenants.
Reimagining cities with flexible office.
Cities are constantly evolving, and to better understand the role of commercial real estate in shaping cities, Cushman & Wakefield, in partnership with Places Platform LLC, launched a first-of-its-kind study on reimagining cities. Read our highly detailed report.
Reimagining cities includes a rebalancing of the live-work-play environment that defines cities. Flexible office has been at the forefront of this rebalancing, bringing both live and play into the work setting for over a decade, creating spaces that promote both socialization and collaboration—employees’ top stated purposes for the office.5
A key finding of the Reimagining Cities study is that nearly 70% of foot traffic in cities comes, not from residents and commuters, but from visitors. This finding shows that cities need to implement more play-focused space into their built environments, which for traditional office buildings means more ground floor retail, greater integration with the surrounding streets, increased experiential economy space, and/or access to public rooftop venues. For cities to rebalance their real estate portfolio mix, they need to consider the role of more flexible office, which has been successful in implementing a balance of live, work and play.
1 https://www.coworkingcafe.com/blog/national-coworking-report/
2 Experience per Square Foot™ diagnostic from 1Q 2023 through Q2 2024.
3 Boston, Chicago, Los Angeles, New York, San Francisco and Washington, DC
4 https://www.prnewswire.com/news-releases/2024-hiring-and-compensation-trends-numbers-to-know-in-a-complex-labor-market-301945047.html
5 Cushman & Wakefield Experience per Square Food Instant Insights April 2024
