The inside of Industrious' coworking space in Midtown Atlanta

Coworking is no longer the new kid on the block in office real estate, but it continues to grow at a startling pace.

From 2017 to 2018, coworking space grew almost 62% in the top 20 office markets in the U.S., according to a Yardi Matrix report. In Q4 2017, those markets totaled 27M SF of shared office space, and by the end of last year that number had risen to 44M SF.

Coworking is twice as prevalent in urban markets compared with suburban ones, and is especially popular in cities with large technology industries and entrepreneur populations. Manhattan is the undisputed king in the industry as the home of both WeWork (now part of The We Company) and Knotel, two of the five biggest coworking portfolios in the country, according to Yardi.

Regus, now IWG, sits at the top of Yardi's list, having been in the flexible office game far longer than second-place WeWork. Its valuation has famously been dwarfed by its younger, buzzier counterpart. In third place is Premier Business Centers, Knotel is fourth and Industrious is fifth. Competition has been fierce in the sector for years now, marked at times by lawsuits and accusations of meddling among its leaders.

Yardi cites a "relatively low barrier to entry" as a secondary driver of the competition in the industry, behind its popularity among an increasing share of office users. As those tenants begin to see office space as "a flexible service rather than a fixed expense," flexible workspace is becoming a must-have amenity for office landlords, whether through a third-party operator or run in-house.