For companies looking for flexible office space in Manhattan, WeWork just seems to work.
The coworking company now officially occupies the most space in Manhattan, The Wall Street Journal reports, surpassing JPMorgan Chase for the record. WeWork now rents 5.3 million square feet throughout the borough, edging out JPMorgan Chase's occupation of 5.2 million square feet — a development that reveals how flexible leases are undermining traditional real estate.
Because WeWork rents out large office blocks and divides them up among tenants, it can offer smaller spaces and shorter leases than a normal landlord. These flexible plans, paired with attractive amenities like lounges and beer on tap, originally attracted small startups. But even big firms such as Amazon and Verizon have hopped on the coworking train, driving WeWork's recent growth, the Journal points out.
This freedom comes with a price. Square footage in a coworking spot often costs double or triple what a traditional office does, and flex-space companies pack about three desks into the space typical offices usually reserve for one, the Journal says.
Still, growing interest in flex-space spots has led WeWork and its peers to dominate 9.7 percent of new Manhattan leases so far in 2018. The same companies only made up 3.3 percent of leases in 2017, per the Journal. WeWork has grown even more dramatically than its coworking peers, boosting its total space around the world from 19.5 million square feet in 2017 to 36.4 million so far in 2018. And with larger companies starting to pour in, the Journal expects WeWork and pals to start slinging a lot more cucumber water in the next few years.