Flexible Office Leasing Slows Significantly in Q4
- Flexible office leasing volume totaled 1.0 million sq. ft. in Q4, down by 75.3% from the prior quarter and by 79.7% from Q4 2018. The drop is largely attributable to WeWork’s pullback in leasing after its failed IPO in late Q3.
- For full-year 2019, leasing by flex operators was down 11.6% to 12.1 million sq. ft. from 13.7 million sq. ft. in 2018. Despite this slowdown, demand for flex space is still growing, albeit at a slower rate.
- More than 86% of flex leasing activity in Q4 was in new leases or expansions. Flex operator Spaces (IWG) accounted for 36.2% of new flex leasing activity in Q4 (vs. 3.9% in Q3), while WeWork accounted for 21.8% (vs. 69.4% in Q3).