Coworking’s rapid expansion has been concentrated in gateway U.S. markets, but smaller coworking providers are capitalizing on untapped demand in smaller cities. And they aren’t afraid of the $47B elephant in the room.

“It’s a practical matter,” Serendipity Labs CEO and Chairman John Arenas said. “It’s very hard to transfer some brands outside of big city centers.”

While Serendipity Labs has locations in gateway markets like Chicago, Los Angeles and New York City, the coworking company is growing through a mix of company-owned and franchised locations. Many of its more than 100 locations in development are planned for suburban or secondary U.S. markets, which Arenas attributes to increased and unmet demand from suburbanites who want a flexible space to work closer to home.

Serendipity Labs isn’t the only outlet to pick up on the trend.

Urban Land Institute's 2019 Emerging Trends in Real Estate report showed significant real estate industry and investor confidence in suburban markets as well as non-gateway, “18-hour cities.” Part of the optimism is because smaller cities like Pittsburgh and Nashville have diversified their economies, which better protects them from economic downturns. It also helps that millennials, despite initial reports that they were avoiding the suburbs, have begun to move out of city centers like their parents.