City Heatmap: Where Third Spaces are Surging in New York

Flexible work models are reshaping business around the world - and the New York labor market is no stranger to this transformation. Today, its employees tend to work from a central office only 57% of the time on an average weekday, which has plummeted from around 79% pre-pandemic.

What's more, 69% of New York organizations now use a hybrid work model, with just 10% requiring daily attendance. This paints a stark contrast to the years before the pandemic, when 84% of New York employers required daily in-office attendance and only 1% allowed fully remote work.

The New York workplace as we knew it is no more. Historically, the office was a place employees went 5 days a week regardless of what their day had in store for them. Today, employees in the Big Apple go to an office around 3 days per week. This means team meetings, collaboration and cultural gatherings tend to happen on these office days, with routine or individual work carried out on remote days. The physical office has been reinvented as a place for collaboration or culture, rather than everyday tasks.

At the same time, the New York flexible office market has matured in 2025 - with more co-working spaces in a wider variety of locations than ever before. We're also seeing a shift in business model for many co-working brands working in New York City - from a startup-focused expansion to a strategic service catering primarily to large corporate enterprise clients adapting to hybrid models. This means there are simply more options out there for hybrid organizations in need of ready-to-use, amenity-rich environments that help them avoid the rising costs of traditional office leases.

These flexible solutions are helping New York enterprises juggle the need on the one hand to mandate in-person working in order to unlock collaboration and creativity, and on the other hand to meet growing employee demand for independence and autonomy. A diversity of workspace solutions means firms that do retain a central office are favoring higher-quality stock rather than simply make the best of older or cheaper real estate investments.

For New York employers and employees, the very definition of an "office" has changed. The future success of organizations here relies on their ability to strategically leverage these new models of work and workplace. It depends on their access to reliable insights on the way their employees interact and innovate, and whether they have their finger on the pulse of the "third space" trends driving a revolution in New York City.

In this article, we dig into the currents that are shaping the way people work in New York, where and why "third spaces" are on the rise, and how your business can seize the opportunities presented by the flexible work revolution in New York City.

The lay of the (is)land: Why NYC is going hybrid

The rhythm of the city that never sleeps is changing - why? With off-the-shelf, one-size-fits-all workplaces long gone, organizations are designing their own approach from scratch. But what factors are influencing hybrid work in 2025?

• A rise in flexible spaces and co-working locations across the city, in particular in the outer boroughs. Quite simply, real-estate is being re-purposed. The number of "third spaces" for co-working in New York City grew by around 6% over the last year, and that figure jumps to 8% in the outer boroughs. Previously co-working was seen as exclusively for startups and SMEs because of the impression that there simply wouldn't be enough seats for a large enterprise to leverage it - that's rapidly changing.

• A soaring cost of living. When surveyed, almost a quarter of employees in the New York City area say if their flexibility was taken away, they would expect a pay increase to cover the costs. Some studies show that New Yorkers save $42 a day by working from home. This means any kind of return-to-office mandate will now come with the question of additional costs for workers already facing high housing, commuting and utility costs. It's no surprise then that employers are increasingly providing a local co-working "third space", that gives workers somewhere to go which isn't their home or central office. This means employees can take advantage of a potential $42 daily saving, strengthening retention and protecting employers from inflation-driven wage pressure at the same time.

• A more distributed workforce. The remote work shift during the pandemic initially allowed many employees, untethered from their daily commutes, to move further from the City itself and save on high property prices. From 2021 to early 2024, inflation-adjusted consumer spending grew markedly in the outer boroughs: Queens saw a 32% increase, the Bronx a 7% increase, and Brooklyn a 2% increase, while Manhattan lagged at 85% of pre-pandemic levels. The workforce has spread out. Employees hope to benefit from a New York salary while living outside the most expensive areas. Employers are therefore increasingly adopting a hub-and-spoke model where centralized Manhattan offices are augmented by flexible, satellite locations closer to a more scattered workforce.

• New congestion pricing. In January 2025, a new $9 peak-hour toll on passenger vehicles entering the Manhattan Central Business District was introduced, in an effort to reduce the number of cars on the roads to lessen both traffic and pollution - and divert funds to the transit network. While many have pivoted to public transport and early benefits have been reported, suburban car commuters are hit disproportionately, especially from areas like the Hudson Valley where continuous train options are limited. This creates friction in the case of return-to-office mandates, and makes the case stronger for satellite "third spaces".

• Regulatory challenges that reinforce sectoral siloes. Organizations bringing in return-to-office (RTO) mandates are being impacted by the regulatory and legal complexity of remote work. Studies show that the highest average daily attendance in the office is in the financial services (62%), real-estate (85%) and law (62%) sectors. This makes sense given, for instance, in the financial sector new FINRA regulations mean home offices in some cases have to be registered and inspected. Mandatory cybersecurity controls and documentation requirements are creating a bureaucratic hurdle that is increasingly acting as a disincentive for New York banks and law firms to take advantage of hybrid or remote work models.

• Hyper-localization. Hour-long commutes were a common feature of work life pre-pandemic. But employees now expect workplace options closer to home. The rise of the 15-minute city means New York City has become even more decentralized and urban residents can find everything they need for day-to-day living within a close radius: a physical third place, the shops they need, healthcare services, a gym. What's more, the City's municipal planning bodies are actively encouraging this suburbanization trend through its "complete neighborhood" framework which seeks to provide green spaces, essential services and amenities to drive local neighborhood growth and cohesion. This has important knock-on effects for the hybrid work model. For example, this 'villagification' means Brooklyn-based workers are less likely to commute to the Upper West Side to a central workplace, and more likely to request a local workspace option whether they can gather with other employees in their neighborhood. Coworking space in outer areas (like Brooklyn and Queens) grew by 8% from 2024 to 2025. This shows that companies are adopting multi-site strategies, using flexible hubs closer to where their employees live to reduce costly, stressful commutes and to manage long-term P&L risk.

• Decline in the value of traditional office buildings. Commercial real-estate is no longer the safe bet it once was for CEOs, leading many to radically reconsider their real estate strategy. Remote work has been forecast to lead to a 39% decline in the long-term value of commercial office buildings across New York City - and a staggering $413 billion value destruction across the US. This value drop is caused by low occupancy rates, high utility bills, rising market rents and lease renewal rates. With a glut of empty space across the city, conversions of traditional office spaces into homes is projected to hit a huge 4.1million square feet in 2025, driven by city incentives like the 467-m program. This is leading to a "flight to quality" response, where companies recognize that if employees only come in a few days of week, the office needs to offer them a better experience that feels worth the journey and benefits them in their long-term career development. As a result, competition for the best spaces in New York is extremely high, while Class B and C offices are going unused - with many becoming a "stranded asset". A growing closure of work spaces in Manhattan shows there's a tactical pivot underway, with underperforming sites being shut down to prioritize fewer, larger and higher-end spaces that meet rising standards for workplaces.

• The fight to keep top talent. A quarter of firms in New York say they will revisit and increase their office attendance requirements in the next year. This should be taken as evidence that though many have tried to implement a "new normal" in hybrid work, it's not having the desired effect. Employee resistance to strict RTO policies is high, providing leverage in the ongoing workplace negotiation. In fact, eight out of ten US companies report losing talent due to their RTO policies. The strong employee preference for flexibility makes it an essential component of talent attraction, and employers across the City are struggling to cut through in a saturated talent market.

Now that we know what's driving the hybrid work revolution, what does it actually look like in reality? Let's explore some key trends and how they map onto workplace solutions in New York City today.

Where People Actually Work: How the New York City Workplace Landscape Is Changing

Where People Work in NYC Trend 1: The Central Convergence Hub

Real estate leads in New York firms are consolidating their space in the centre of the city, optimizing their portfolios by shedding smaller or lower-quality space, and focussing their resource on high-utility spaces in Midtown, Manhattan or in the Grand Central area that people can access easily.

Where in the past companies might have had a number of spaces in Manhattan, we're seeing a shift towards just one 'mega-hub' that becomes a critical meeting point for employees that commute once a week or twice a month from, for instance, New Jersey, Westchester and Long Island.

This means the requirements for these kinds of workplaces have changed: they must be larger, designed for scheduled use, be amenity-rich to make sure they're worth the commute, and be more oriented towards collaboration and shared work rather than individual daily grind.

Where People Work in NYC Trend 2: The Satellite Office

We're seeing a steep rise in co-working and "third space" use in suburban markets. For example, between 2019 and 2024, demand for flexible workspace grew by 38% in Fairfield County, Connecticut, and 33% in Morris County, New Jersey. With the central hub consolidated to just one space, workers now seek high-quality local spaces closer to home.

Enter the suburban collaboration satellite space: mid-sized flexible facilities in suburban corridors outside the core central business district. These spaces serve as logistical efficiency hubs, designed for large team meetings, project kickoffs, and departmental off-sites without requiring an extensive commute into Manhattan.

It's no surprise then that co-working operators are growing their footprint in areas like White Plains, Great Neck, Huntington, and Tarrytown.

For example, for a medium-to-large enterprise, using a satellite space through a flexible workspace provider in White Plains for a Westchester-based team meeting saves hundreds of collective commute hours when you compare it to forcing all workers to travel to Midtown. There's an obvious efficiency and employee-satisfaction win here.

Where People Work in NYC Trend 3: The 'Summer House' Workers

If we look at senior leadership teams, we're also seeing a rise in more transient workers who want to split their time between the city and seasonal or country retreats. Leaders are seeking a better work-life balance without compromising on their New York City executive salary, and the workplace infrastructure is evolving to meet that demand.

Increasingly, workers need temporary professional space for 2-4 days a week near their second homes outside the city. The Hudson Valley and Woodstock have become a core hub for this group, seeking seamless access to local spaces as a contrast to their City office.

Enterprises in New York are moving away from the poles of working from the office or working from home, supporting their employees to work from multiple spaces throughout the working week.

A simple co-working pass can sometimes solve this issue, but given the solutions are highly-dependent on where employees live and what they need to use spaces for, it's not always a silver bullet.

Overwhelm or opportunity? How to navigate the flexible work movement in NYC

HR leaders, especially in national or multinational companies, face the overwhelming challenge of offering tailored, flexible workplace solutions to employees around the US, or even around the world. It would be impossible for them to get to grips with market and worker trends in every single one of these urban areas, not to mention the vendor overload that comes with securing spaces in each region and the need for data recall to inform the following contractor selection process. So as we look towards 2026, how can organizations navigate the flexible work movement in New York City? At Croissant, we've had a front-row seat to the workplace transformation, and here's how to take advantage of this shift, rather than be swallowed whole by it.

1. Audit your office portfolio and consider a fixed/flexible approach. Traditional New York office assets simply aren't as valuable as they once were. So it's time to assess the returns on these investments, not just from an occupancy perspective, but also whether they are providing the right environment for mentoring, casual idea-sharing, personal development and true creative collaboration. What's the actual cost of un-use? This question leads many to consolidate their stock to just one or two central hubs. After that they can supplement other office needs with flexible contracts and spaces near to where employees work. It's all about keeping geographic agility for a distributed workforce, while at the same time managing the cost volatility of real-estate. This must be based on a data-driven assessment of how your spaces are performing, and a detachment from archaic attachment to the traditional office model.

2. Design a Collaboration-As-A-Service model within your hybrid work policy. Employees don't just want to be given a place to work, they want their HR teams, people leaders and CEOs to give them a way to work too. So when approaching hybrid work, consider how flexible work spaces underpin culture and enable co-working in a truly collaborative sense. For example, one New York firm found, using a bubble map of their workers, that they had a concentration of staff in Morris, New Jersey that rarely encountered one another aside from their mandated one-day-a-week in their Midtown office. Their office manager also noticed that those workers came from different disciplines in the business where siloes were baked in, so set up a satellite office in New Jersey for those employees to gather once a month to learn about different strands of the business, give feedback on others' work and build community in their local area. That's so much more than just a local co-working offer, that's collaboration-as-a-service. In this case, hyper-local flexible access and community building becomes a strategic employee retention tool which is highly valuable.

3. Define the office's actual purpose. The success of a hybrid work model essentially hinges on a balance of worker autonomy vs the right amount of structured leadership to make remote work fulfilling and efficient. Research shows if hybrid workers were faced with a 5-day return-to-office mandate, 14% would quit immediately and 41% would start a job search. If you want to prevent a talent exodus and defend against the backfiring of your flexible work offer, you need to set out clearly to your workforce what the point of their office actually is. Is it so you can gather as an entire workforce to hear from senior leaders, is it to use specialised equipment which is only available on-site, is it to work closely with those in your team on a particular product, is it to gather with other departmental leaders to plan for the next quarter, or to interact with people you don't work with directly to break down barriers and encourage mutual inspiration? Without this, employees are likely to see any kind of in-person mandate as grounded in a lack of trust and a desire to micro-manage or supervise when it isn't needed.

4. Engage an expert workspace partner. A workspace partner can help you design a value-adding hybrid work policy, locate the right spaces for your business, whether fixed, temporary or flexible and give you exclusive data insight on how your employees use those spaces. Working with a partner like Croissant can also lower the strain on HR teams that are often drowning in vendor relationships, usage data and the need to protect against the hidden costs of remote work.

On the Croissant scale of hybrid-mature cities, New York is up there. A strong network of alternative "third spaces", a workforce that has a healthy appetite for flexibility as well as in-person collaboration, an ongoing diversification away from a central business district to modern hubs of urban activity, and a growing number of innovative businesses that are taking advantage of hybrid work to better retain and attract talent, optimize their real-estate portfolio and stay agile in the face of decentralization from Manhattan. Get in touch today to improve your New York hybrid work offering.