Manhattan is the largest coworking market in the U.S. by far, but a year after its largest player, WeWork, emerged from bankruptcy, the amount of space in the borough is on the decline.
Bisnow/Ethan Rothstein
Manhattan lost 400K SF of coworking space between the first and second quarters, according to a new report by CoworkingCafe, a research division of Yardi Systems. The number of coworking spaces in the city dropped by 13.
There is now 10.9M SF of coworking space in Manhattan across 267 locations, down from 11.3M SF at the end of the first quarter, according to the report. Chicago, the second-largest U.S. coworking market, had 8.2M SF of inventory in Q2, up slightly from the prior quarter.
CoworkingCafe declined to provide a list of NYC spaces that closed, but the report says it was the first time in its history that Manhattan’s coworking market shrank.
“The slowdown reflects the city’s oversaturation and high operating costs, prompting major players to reassess their space allocations and exit non-essential leases,” the report says.
The findings come as somewhat of a surprise considering WeWork has been signing new deals in the city, including a 60K SF lease at 250 Broadway last month and a 55K SF lease at 250 Fifth Ave. this week. But the fallout from its bankruptcy — which ended in the company being taken private by Yardi last June — could explain some of the shrinkage.
WeWork rejected more than 100 locations during its Chapter 11 bankruptcy and restructured hundreds more, many of which were negotiated with shorter terms and early termination clauses. Its 55K SF 250 Fifth location, for instance, will replace its nearby location at 27 E. 28th St., where it signed a 108K SF deal in 2014, Commercial Observer reported.
But even as it was closing dozens of locations in Manhattan, many were snapped up by competitors, keeping the city’s overall market in growth mode until now.
A WeWork spokesperson declined to comment for this story.
The company added two locations in the top 50 markets tracked by CoworkingCafe in the second quarter, bringing it from 148 to 150, but its pace of growth was dwarfed by rivals. Regus added nearly 50 locations in the second quarter. HQ, another International Workplace Group subsidiary, added 23, and CBRE’s Industrious grew by five locations.
“This demonstrates Regus’s unmatched scale and ongoing aggressive growth strategy that’s particularly focused on consolidating leadership in major urban centers while simultaneously penetrating high-potential secondary markets,” the report says.
An IWG spokesperson didn’t respond to a request for comment.
Nationwide, the number of coworking spaces declined for the first time in the postpandemic era, from 7,840 to 7,742, although locations are getting bigger on average. The total coworking footprint in the U.S. is now 141.3M SF, up from 140.8M SF in the first quarter and roughly 137M SF at the end of 2024.