The COVID-19 pandemic changed everything, and how we work is no exception.
The pandemic flipped the typical office on its head and accelerated the transformation toward flexible office spaces.
Property managers, landlords, and conventional office spaces realize these trends are here to stay. Many are incorporating flex office space into their portfolio. That’s because flex space, put simply, is the future of the modern office.
But maybe you’re confused about what exactly flexible office space is, why it’s the future, and how you can benefit from it.
We created this post to answer any questions you might have so that you can stay ahead of the curve by taking advantage of this workspace revolution.
First, let’s clarify what we’re talking about.
Let’s dive in.
Flexible office space is a dynamic workspace designed to give workers more options and a better workflow while reducing expenses and constraints for the company.
Flex offices can take many forms, but, essentially, they give workers possibilities in how they work. As a result, employees can decide on the best possible workflow for any given project.
Compare that to the traditional office. There’s a long-term lease or real estate investment on an office space specific to a company. There are cubicles, offices, and conference rooms, but these spaces don’t change depending on the project or employee. Workers adapt to the workspace; the workspace doesn’t adapt to them.
Flex spaces are less rigid. They allow for creativity and collaboration in spaces that can be modified to the needs of the business and its workers. This was one of the insights captured during our FlexWorld Series 2023 online conference.
You may come across many terms to discuss flexible workspaces: coworking spaces, serviced offices, flexible office spaces, flex spaces, dynamic office spaces, etc. It can get confusing.
But here’s all you need to know: While there is some nuance to these terms, they’re all united by a flexible lease and the goal of creating a more adaptable environment for the worker/tenant.
“Flex spaces” or “flexible workspaces” can be used as umbrella terms when discussing these workspaces.
Flexible spaces can be managed by individual landlords, flex workspace companies, or various partnerships between the two.
The biggest difference is that flex leasing can have a much shorter time commitment. The contract may be as long as one or two years. Or it may run on a month-to-month basis — something unheard of in traditional building leases.
Flexible space supported by flexible office lease terms means that it’s easier to add extra space or release unused space from the contract.
Traditional office leases that last five or six years in a set space simply don’t allow for these possibilities in the same way.
Flexible office design puts the focus on the human experience in the workplace. It’s a great employee motivator that attracts workers in the office.
The modern worker has diverse needs, and multipurpose design accommodates these needs. It increases productivity, improves the tenant experience, and encourages engagement.
So, a flexible workspace could convert into a collaborative workspace, a conference room, or a quiet zone. It depends on the needs of the employee who uses it at the time. It also depends on the amount of office space you have.
That’s because, as projects change, so do the team’s needs. Because these spaces can be quickly combined for team collaboration, or quickly individualized when a solo focus is the goal, they offer spaces that match the project or workflow.
This design puts options into workers’ hands. Rather than being assigned a workspace, they can choose one. And rather than working within the constraints of their office, they can modify their environment to their needs.
There are many design elements typically used within flexible office design:
Although there are many types of flex spaces, there are four main ones:
An open-plan office concept where companies and individuals share the space with a variety of amenities, including desks, internet access, refreshments, meeting rooms, etc.
Priced on a per desk/per month basis, coworking spaces are mostly used by small startups and freelancers.
Fully furnished offices are available for immediate move-in for bigger companies. They have the option of customizing a space to a company’s brand image.
Extras include reception services and additional support, such as maintenance and IT. The contracts are typically longer and can range from one desk to a dedicated floor.
This type of workspace arrangement has desks available to workers on an as-needed basis. Hot desking has become more popular with hybrid work.
Here’s how it works: Not all employees are on site on any given day. So, rather than being assigned desks, employees use an available desk and then pass it off to the next person when they finish for the day.
Hot desking requires far less space than a traditional office workspace as business owners pay only for the space they use, thus saving costs. Closely related to hot desking is a practice called “hoteling,” which combines hot desking with a dynamic desk-booking and scheduling system.
Check out the video below that explains the importance of using hot desking software for managing such types of office space arrangements.
You can read more about hot desking and office hoteling here.
Virtual offices are businesses without physical locations. They instead rely on technology such as videoconferencing, messaging apps, and phone answering services.
These offices typically have a physical address for mailing purposes and to prove that the business is legitimate. Contracts can be very cheap, depending on the level of services the business provides. Virtual offices typically operate using month-to-month contracts.
A managed office is a hybrid of a serviced office and a standard commercial lease.
The managed space caters to the needs of corporations with contract terms over a year. This kind of office space provides a branded workspace with a package of services tailored to individual business objectives.
The demand for flexible workspace solutions has steadily increased over the last decade, and the pandemic has only quickened the pace.
In their survey of corporate real estate professionals, JLL found that 43% of firms planned to boost their flex space investment through 2025. That increased investment is borne out of necessity.
In the past, conventional leasing ranged anywhere from 3 to 15 years. Businesses felt fairly confident in the long-term stability of industry trends and models. They could safely predict the future — to a degree, of course.
In the wake of the global pandemic and the economic uncertainty it caused, it no longer made sense for business owners to commit to such long time frames.
The world was certain to change within the duration of the lease. As a result, landlords and traditional office providers had no choice but to adapt by offering flexible lease arrangements.
Before, flex offices mostly served the needs of freelancers and startups. Their struggle to predict future cash flows created a demand for flexibility.
Now, the focus is on bringing in the corporate audience that aspires to accommodate the wishes of its employees in order to attract the best talent.
And what employees want nowadays is clear: to abandon the traditional office workspace in favor of adopting the hybrid work model.
The lockdowns during COVID-19 educated us on the pros and cons of working remotely, and now workers are the ones demanding changes in the way we use offices.
See how hybrid work can increase business for your flex space here.
And if you want to learn more about the future of flex spaces, you’ll be very interested in the Flexworld 2023 conference.
The COVID-19 pandemic challenged both business owners and commercial real estate landlords.
For landlords, tenants who weren’t operating due to the lockdowns posed a significant issue. Tenants struggled to pay rent and, in turn, landlords were stuck with empty buildings and no income.
The business owners’ problem was that they were trying to meet an inflexible lease. Some businesses switched to remote work but still had obligations to a physical building.
Flexible office space offers a solution to both landlords and business owners.
Working from home is here to stay, but companies still need office space. What’s changed is the type of office space they need and their new options in the real estate landscape.
They all crave flexibility. Huge corporations like Apple, Twitter, and Facebook are now adopting the flexible working model.
They allow their employees to work both from home and in the office. This hybrid-work approach has grown in popularity leading to companies and professionals looking for flexible ways of renting and using office space.
And that’s why it becomes essential for landlords and operators to adopt flex as part of their leasing prospects.
Adding flexible space to your real estate portfolio will provide you with an extra revenue stream.
As a flex space operator, you’ll be able to attract new office tenants and increase foot traffic inside and around your building. You’ll have lower vacancy rates and diversify your offerings by making yourself less susceptible to economic downturns.
Moreover, you can sell your flex office space at a higher price per square meter compared to your long-term office space. The shorter the lease, the higher the price.
Here’s a useful article on how to generate more revenue for coworking spaces.
Additionally, during recessionary conditions, the demand for flexible space will always be higher compared to conventional office spaces.
A joint venture model with global and regional operators can help landlords leverage the expertise and know-how of prominent coworking brands. In turn, landlords can offer expertise on capital and resources.
Such partnerships can help flex operators reduce competition and consolidate the market while providing increased brand value and better service offerings to clients.
Commercial real estate leases can be exorbitantly high. As businesses adopt hybrid and remote work structures, they need less space. Less space costs less money.
Having too much space (and thus paying for it) is a common problem. According to a report by Density, over 70% of workspaces use just one-quarter of their capacity.
Flex workspaces also free up money to benefit the business in other ways. Paying only for the space they need means businesses may be able to operate in lucrative locations that would not otherwise be possible. Or, because flex leases are less expensive, businesses can afford to pay a premium for location.
As a related read, check out this ultimate office move checklist.
With a flexible lease, businesses can make bigger changes more quickly. Rather than having to run out the clock for years, as in a traditional lease, flexible lease terms usually operate in the realm of months.
Flex offices are also easier to scale up and down. Businesses can reduce workforce without paying for unused space, or expand quickly when it’s time to hire.
Perhaps the greatest benefit to business owners is happier workers.
A survey by Harvard Business Review found that most of those surveyed were happier working in a coworking space than in an office or at home.
Because employees can take ownership of their workspace, tweak it to their needs, and adapt to their changing workflows, they’re generally more satisfied with their jobs.
The social dynamics a flexible office space offers also make for better coworker relationships — which are strongly tied to job satisfaction.
And workers who are more satisfied with their jobs are more likely to stay longer, which reduces the company’s turnover-related expenses.
The traditional office can stifle work for some employees. Having to do all tasks in the same space, regardless of their nature, no longer makes sense in many cases.
Workers tapping into the most effective spaces for various tasks can increase productivity.
Businesses that use flex office space also benefit from increased collaboration between employees. Without cubicles, employees are more visible to each other and can communicate more easily. Here’s a nice resource that shows some popular workplace collaboration examples.
Businesses are also more collaborative with each other as a result.
And these businesses have more opportunities to form strategic partnerships because flex office leases often house multiple companies within one general workplace. This exposure leads to greater awareness of your business.
A smart workplace experience technology can help you automate and streamline operational processes, drive demand, and optimize revenue.
Having the right tech stack will help you avoid wasting resources on low-impact improvements or systems and focus on providing exceptional value to your tenants.
Various technological solutions can help flex spaces with their day-to-day operational activities, such as membership management, billing, desk, and room bookings.
If you’re just starting out, you can take advantage of our Flex Startup program which offers some benefits you don’t want to miss.
There are several ways you can do this. You could create zones for different work functions (quiet corners, team offices, and soundproofed rooms for phone calls).
You could also create comfortable areas with cozy spaces, ergonomic designs, and natural features. Or you could offer your employees a role in designing or modifying your workspace.
While there are many forms of flexible office space, co-working spaces usually refer to a workspace that’s shared by more than one company.
Due to hybrid work trends and economic uncertainty, flex office space provides a sound investment opportunity. Flexible spaces usually require less capital for the initial investment, and the leases are easier to fill than those in a traditional office space due to being smaller and shorter. Moreover, hybrid work impacts commercial real estate.
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