Flex space will play an increasingly important role in the future of the office sector as occupiers demand more agility from physical office space, according to a new analysis from Yardi Matrix—and big changes are expected in how flex space operators earn revenue.  

"Going forward, it is less likely that flex space operators will use the revenue model common before COVID-19, where operators signed leases for high-quality space in city centers and then rented the space out to their members," the Yardi report notes, adding that the firm's researchers expect franchising and management agreements with revenue sharing to become more common. 

What's more, "in management agreements, landlords will be responsible for the cost of fit-outs but are able to receive a larger share of the revenue from the operators," the report states. "These agreements also reduce the risk of leasing to a single flex space tenant and align incentives between the operators and landlords."