Flexible office space is poised for a comeback, a year after the COVID-19 pandemic shuttered new leasing activity and drove leasing volume down 92%, according to a new report on the state of the sector from JLL.

Flex space enjoyed a meteoric rise from 2014 to 2019, with average of 25% growth per year. In 2019, pre-COVID, it made up as much 20% of leasing activity in cities like New York and London. But what made flex space so attractive pre-pandemic would ultimately prove to be its undoing as COVID-19 swept across the country last year. 

Yet there are signs the sector is digging out of its COVID hole, the most high-profile example being WeWork's recent comeback (in the form of a merger that will take the company public via a SPAC). The deal will give the flex office provider $1.3 billion in cash to fund its growth plans after a year in which the company significantly scaled back its footprint and obligations. In 2020, WeWork executed over 100 lease amendments for rent reductions, deferrals, or tenant improvement allowances resulting in an estimated $4 billion reduction in future lease payments.