Flexible Office Research & Industry Trends

Employees are eager to maintain the flexibility of widespread remote work established during the pandemic and are interested in working from home an average of two days per week. This hybrid approach is the most sought after, with nearly three-quarters of employees wanting to have access to an office. Further, JLL’s earlier Human Performance report found that 80 percent of high performers have missed their office greatly during lockdown.

The office lives as a place for collaboration: More than 80 percent say that the office will be used for collaboration and teamwork, as opposed to individual work, also a number that has consistently been increasing.

Coworking is expected to play a greater role as offices shrink. Thirty percent of respondents expect to increase their coworking usage post-pandemic. Another 53% intend to keep coworking space at current levels post-pandemic, and 16% expect to decrease their coworking usage.

86% of Companies Plan to Incorporate Flex Space Into Post-Pandemic Real Estate Strategies

The pandemic-induced downturn that some feared would severely impact the flexible office space sector has instead landed flex space a prime role in future office strategies, according to a new report from CBRE.

Offices around the world were left empty during the pandemic, making business particularly tough for some flexible-space operators as occupiers reacted to economic upheaval. Now, some of the larger operators are looking to capitalize on challenges in the sector, pushing ahead with plans to expand.

In June, listed flex-space group IWG took over 30,000 square feet of office space in Hong Kong that had been leased previously by another flex operator. U.S. groups Serendipity Labs and Industrious are also in a strong position to expand, says Ben Munn, managing director, flexible space at JLL.

(Businesses) may choose to lease space in nearby suburbs, not too far from their original CBD base. This minimizes disruptions like having to deal with employee relocation costs (if the choice of suburban space, for example, is less than 25 miles away from the original CBD location), and may translate to savings in rental costs given that suburban office space tends to be cheaper than CBD options.

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Companies providing serviced office space are experiencing a huge upsurge in demand from people who are finding it too hard to work from home, with kids off school, too many distractions or not enough usable work space.

The coworking industry gained popularity due to its flexibility, a vital characteristic during the coronavirus pandemic.

Putting your people and portfolio in the right position—a healthy place—requires a strong plan and platform. CRE occupiers seeking continuity in the age of coronavirus are finding value in versatility.

Companies forced to switch entirely to working from home because of coronavirus have provided a large-scale case study for remote work. Experts think it will reshape the way companies see offices in the future.

(Before) we can ask people to return to the office, we’ve got to make sure they feel safe, healthy, and valued in their workplace. And, while it’s too early to understand the full extent of the new skills and habits we’re developing while working en masse from home, it’s not too early to start planning for how we can return hundreds of thousands of people to the workplace once the quarantines end.

Preparing to reopen requires the development of detailed plans for each location, reconfiguration of the physical environment to support social distancing practices, and continuous communications.

The primary benefit of coworking is the flexibility it provides. It is turnkey and can be utilized to ramp portfolios up and/or down with greater speed. The flexible workplace reduces the time required to access new space, the cost of initial capital expenditures to build out the space and the long-term financial liability of a traditional lease by providing occupiers with instant access to a turnkey, fully-furnished and tech enabled workplace.

Corporate organization’s are looking for larger and more agile workspaces, which is symptomatic of a global move towards more flexible lease terms.

Shared office space appears to be the fastest-growing trend in commercial real estate. The rapid growth in coworking, which has forced commercial real estate companies to rethink how they plan and deploy office space, doesn’t appear to be slowing down anytime soon.

Increasingly perceived as a strategic necessity by landlords and investors. Coworking or flexible offices are becoming a staple in buildings.

Explore Partnership Opportunities with third-party operators. Seeking out partnership agreements may allow landlords to benefit from an increased income stream, therefore negating some of the associated risk with this sector.

The niche flexible segment should continue to mature and expand, potentially boosting its share of class A office space nationally to as much as 10% by 2028. This represents significant growth, but remains a small enough share that broad risk from flex tenants is not a concern

Given industry shifts, flexible workspace and shared amenity spaces are projected to encompass approximately 30% of the office market by 2030.

Respondents who report having variety and having a choice are more likely to report having a great experience. That means the right mobility strategy should leverage amenities that create more choice and facilitate the work we need to get done.

2018 showed significant market shifts with an increase in corporate clients looking for flex space. This year alone saw an increase in demand from corporate clients of 21%.

Right now, flex space inventory accounts for less than 5 percent of U.S. office stock. There’s not a single U.S. market that’s oversaturated.

Downturn Ready? – Since the vast majority of flexible workspace came online after the Great Recession (late 2007 to mid-2009), its performance during a downturn is untested, but it could provide a buffer to landlords as occupier clients put a premium on flexibility during a downturn.

We anticipate operator growth in fringe districts of tier one markets and further expansion in tier two and three markets. While we have been talking about the uptick in freelancers and the gig economy in urban markets for several years, we see suburban operator growth being driven by large scale occupiers executing flexible working policies for their employees based in decentralized locations — driven by larger cohorts of aging millennials moving to suburbs, and enterprises embracing more decentralized portfolio strategies.

We also see franchising to be a major driver of flexible workspace growth in suburbs and decentralized locations in 2020.