The Different Flavors of Flex Office

The North American flex-office sector has evolved through the pandemic into a more sophisticated version of itself, gradually shifting to rely more on large companies as users of flex space than on startups and individuals, according to a new report from CBRE. 

Flex space’s versatility also has made it a frequent option for companies striving to accommodate new changes in how they use office space.

CBRE defines flex space to include multiple formats of office space leased for shorter-than-traditional terms. That includes coworking, which often entails communal desks and common areas used by a flex operator’s occupants. But it also includes faster-growing models, such as private suites and enterprise offerings, which dedicate offices or entire floors for exclusive use by individual companies.

CBRE analyzed flex offices in 49 North American markets, finding that 15 recorded a net expansion of their flex square footage in the year ended in September, 28 notched a net contraction, and six saw no change. The biggest expanders were secondary and satellite markets such as suburban Maryland (5.9 percent gain).. Houston (5.2 percent gain) was the largest market to post an increase.

Among flex options that have gained traction as companies experiment with new work arrangements are the core-plus flex model in which users occupy long-term space and flex space in the same building or campus, and subscription-based services that allow employees to work from any of a flex provider’s locations across the market, country or globe.

Subscription plans, to name one, have long proven to be popular among a wide range of users. Trevor Adler, partner at law firm Stroock, tells GlobeSt.com that flex office space providers such as WeWork offer different packages and pricing for the ability to work in one particular location or “passes” granting access to multiple locations.

Corporations including IBM have also hired flexible work space companies to operate offices for their employees, he said.

“It will be very interesting to see whether COVID-19 will have a long-term effect on these strategies with the possibility of employees being permitted to work remotely either part or full time,” Adler said.

Joseph Rubin, Consultant, Eisner Advisory Group, tells GlobeSt.com that “More and more companies will be looking to downsize core office needs and substitute with co-working and other meeting space. 

“It’s the same principle for self-driving cars—if it’s sitting in a garage all day, why pay for it full time? Companies will want to pay as they go for office space as well.”

Flex office is also bleeding into other operational areas, with resulting new offerings for users. For instance, Jacob Bates, head of Americas for JLL Flex, tells GlobeSt.com that he is seeing flex as an expansion of traditional property management. “Owners are bundling flex solutions with property management, experience and amenity management, offering customers a truly connected experience enabled by technology. 

“By offering a bundled ecosystem of products and services that are people and hospitality centric, building owners are positioned to compete in the flight to quality in order to attract and retain tenants.”

Indeed, flex options are being offered from a variety of sources as the industry has matured in the past two years, says CBRE’s Christell Bron.

“Building owners now are far more involved in facilitating flex options in their properties, sometimes providing flex space on their own without a third-party manager,” Bron said in prepared remarks. “Companies can choose from a variety of flex options to suit their office needs. And flex providers are expanding into secondary markets.”

Demand Soon to Exceed Supply

The popularity of the flex office model is growing faster than perhaps some users and landlords realize.  “We contend that the demand for flexible solutions is not far away from surpassing the viable supply available and the ownership community needs to quickly evolve their own asset management strategies to deliver these options directly or in conjunction with a third-party operating partner,” Charlie Morris, Practice Leader, Flexible Office Solutions, Avison Young, tells GlobeSt.com. 

Occupiers, as well, are figuring out how to incorporate flex office into their work spaces, Albert De Plazaola, Unispace Global Principal, Strategy, tells GlobeSt.com. “Specifically, we’re seeing clients invest less in large architectural interventions such as walls and unmovable features, and they’re investing more in modular furniture that can be rearranged, scaled or purposed for multiple uses. 

“Additionally, we’re seeing open team areas and assigned seating areas balance each other out—just as employees are coming into the office for socialization and collaboration, they also need space to focus.

“These spaces are becoming more porous as the location where each type of work happens becomes more flexible. Something that’s often overlooked but can come in handy with adapting space usage is office etiquette and protocols. The only thing that differentiates a library room from a group work room is a protocol—and that’s significantly more cost-effective than leasing coworking space.”