WeWork is one lease away from being the biggest office tenant in Manhattan | Innovation
WeWork is about to become the biggest private office tenant in Manhattan. If it leases just another 74,000-square foot office — a typical size for WeWork — it will be bigger than JPMorgan Chase, currently the biggest office occupant in New York’s Manhattan market.
WeWork, which builds out office spaces to rent to both small and large companies, leased around 400,000 square feet of office space in New York City just last week, according to real estate firm Cushman & Wakefield — so it could happen any day now.
That’s a remarkable feat for an eight-year-old company in such a large market. Currently, WeWork’s footprint represents just under 3 percent of office space in the city, but it could rise as high as 5 percent to 10 percent in the next decade. WeWork has 57 locations in New York City.
Cushman & Wakefield estimates that about 30 percent to 40 percent of tenant demand for coworking spaces (including WeWork) is incremental — occupants like freelancers and tiny startups that might not have otherwise rented a traditional office space.
That’s one of the many ways WeWork has transformed office rentals:
- WeWork and other coworking companies are helping keep office vacancy rates in New York City lower and rents higher than they would be otherwise. The 1.7 million square feet that coworking providers leased in the first half of 2018 accounts for a significant chunk — 10 percent — of all new leasing activity in the city this year, according to a new report by Cushman & Wakefield.
- To compete with companies like WeWork, traditional office landlords are increasingly offering things like furniture, meeting rooms and other amenities that tenants have come to expect. We could also see shorter lease terms becoming the new norm, or at least less uncommon.
- The banks no longer have a stranglehold on office real estate. WeWork is the only non-finance company to be a top-five office tenant in Manhattan.