WeWork Cos. now occupies more Manhattan office space than any other company, a milestone that reflects booming demand for flexible workspace among legions of small and midsize firms—and, increasingly, larger companies, too.
The co-working company rents 5.3 million square feet in Manhattan. WeWork calculated that a lease it recently signed for 258,344 square feet at Penn Plaza pushed its total past the 5.2 million square feet of space rented or owned by JPMorgan Chase & Co., according to real estate services firm Cushman & Wakefield.
WeWork is one of the biggest and fastest growing of the “flex space” office providers, a group that also includes Knotel Inc., Industrious Office and IWG PLC. These companies rent office space from building owners, then sublease it for as short as a month or up to three years. They offer tenants greater flexibility than do traditional landlords, which typically lock in renters for a decade or longer.
The New York-based company and similar flex-space operators have made big strides in New York City this year. They accounted for 9.7% of Manhattan’s new leases signed in the first eight months of 2018, compared with only 3.3% in all of 2017, according to real estate services firm CBRE Group Inc.
Some analysts expect flexible space could make up as much as 15% of the real estate portfolios of large companies in the next three to five years.
More recently, co-working companies have fueled their growth by attracting bigger firms that once expressed little interest in flexible office space. Divisions of Amazon Inc., Verizon Communications Inc. and Liberty Mutual Insurance are now taking space through WeWork and its peers.