How Flexible Workspaces Affect Office Space Demand

I have been touring office buildings recently with landlords and brokers and discussing ways on how best to reactivate their buildings. The discussion seems to always start with the concerning trend toward companies downsizing and leaving the building. In many cases I will engage tenants and ask if they like the building and why are they leaving. And every tenant/company responds in the same manner, "We love the location, the views and everything else, but we don't need as much space anymore because of our low utilization." But why can't the landlord accommodate the company? Why aren't these landlords not offering #flexible #workplace #solutions for these companies? As the #flexoffice industry continues to evolve, we keep reading about the struggles and challenges facing landlords today. But does it have to be that way? Why aren't more landlords incorporating a flex offering in their buildings? Today more than ever, employees are looking to align their values with the companies they work at. And since the pandemic there is clearly a cultural and structural shift toward how we work, where we work, and when we gather. First and foremost, employees do want to be together with their peers. And they do appreciate an environment that is inspiring and unique. #FlexOffice continues to grow throughout the US and its delivering results beyond expectations too! Through creative design and incorporating #hospitality elements and other amenities, #flexoffice is about #community and bringing people together to network, collaborate, and gather in ways to learn and meet people. #FlexOffice has multiple revenue streams including but not limited to #privateoffices, #conferencerooms, an expansive #cafe, virutal services, events, training rooms, podcast rooms, wellness and fitness, and so much more. #Reactivating buildings is all about community building and bringing companies together in order to elevate the workplace experience. There is a process much simpler than the old traditional methods in delivering spaces for tenants and its cost effective and sustainable too! More importantly, when executed properly, these flex operations will overachieve and outperform market rents, offering landlords cash flow beyond their expectations. And by offering flexible workplace solutions in your building, tenants/companies who need to downsize can be accommodated in a very simple manner. The process is not contentious and the space is delivered so companies can tour before they occupy!! And that is something many buildings can't provide today!

Is the Traditional Office Dead in the Hybrid Work Era? The seismic shift towards hybrid work models is rewriting the rules of the corporate real estate game. As the rigidity of traditional office spaces clashes with the fluidity of modern work dynamics, the spotlight is shifting towards coworking spaces. These agile environments are breaking down the walls of conventional corporate setups, offering a blend of flexibility, community, and financial savvy. Take a typical scenario from one of my clients: a global financial firm, once tethered to a sprawling, underutilized 10,000-square-foot training facility, now harnesses the power of coworking spaces, renting cutting-edge meeting rooms only when needed. The savings? A substantial six-figure sum annually. It's not just about cost-cutting. The canvas of coworking spaces is rich with collaboration and innovation, woven together by a diverse community of professionals. It’s where a casual conversation between a renewable energy entrepreneur and a data scientist sparks a groundbreaking improvement in solar panel efficiency. The financial narrative is compelling too. Unlike the hidden costs buried in traditional office leases, coworking spaces offer an all-inclusive pricing model, bundling utilities, maintenance, and a plethora of amenities into a transparent membership fee. It’s a model that empowers companies, big or small, to scale with ease, aligning real estate costs with actual needs without getting ensnared in long-term leases. For more details and citations, see my Entrepreneur Media article in the comments.

Really interesting data from Savills (thank you Courtney Guthridge for sharing!). It's no wonder the market for "flex" office space is growing at 15%+ a year. 👉 What began 20 years ago in San Francisco (or Berlin if you ask some) as the creation of "vibey" work spaces for hippies & beatniks to freelance from, today no longer. 👉 Flex today means any office space that can be used by different people at different times -- it's not just about "coworking" anymore. Could be shared kitchens, common areas, conference rooms/phone booths, or even desks. Could be hundreds of companies, or as few as two. 👉 Today corporate users are nearly 40% of flex office occupants -- triple that of just three years ago. As more and more companies accept hybrid as the new standard of work, flex is increasingly desirable. Why? 1) Who wants to come into an empty / apocalyptic office? Traditional office + hybrid = recipe for DEAD space. 2) Why waste money on large/dedicated space you don't need? Traditional office + hybrid = overpaying! Predict we'll see emergence of many new flex options in the coming years, running the spectrum from Airbnb to Ritz Carlton in terms of what's provided and how.

The way we work is forever changed, and there’s no “going back” to the way things were. However, the need to intentionally #reimaginework remains, and #officespace – not to mention all the furniture, equipment, and amenities therein – is a huge part of the shift.    I spoke with Meghan McCarty Carino for her recent story on Marketplace by APM, which looked at everything from commercial leases to unused scented candles! As a #flexiblework strategist who approaches these issues in a way that supports the needs of both the business and its workers, there are many factors to consider before organizations simply slash square footage or the number of workstations available. And, according to Micah Remley, CEO of Robin, 3/4 of businesses plan to shrink their office footprint this year. The question is, by how much?   “You see this unused space, and you think, ‘OK, here’s a great way to save some money,’” I told Meghan. “If [workers] want to use that space to collaborate, but it’s not available, or when they come in, there’s no place for them to sit, they’re not going to tolerate that for very long.”   It’s an interesting juxtaposition – the desire to get employees back to the office and optimize that time spent in person contrasted with the desire (or financial need) to downsize unused space. I agree with Ann Hoffman, IFMA, NCIDQ, LEED AP, who pointed out in the segment that "workplace form follows function." My concern continues to be that organizations still don't have a handle on what that "function" will be in a flexible operating reality that, in many cases, continues to evolve and has yet to be defined. It’s a conversation that’s only just beginning and not going away. We’d love to hear about the space challenges you’re facing or creative solutions working for your organization.   #commercialrealestate #officespace #returntooffice #returntowork #rto #rtomandates #work #workplace #leadership #collaboration #engagement #employeeengagement #talent #talentretention #worklifefit #worklifebalance #workflex #highperformanceflexibility #flexiblework #remotework #workflexibility #hybridwork

Attended the E.V. Williams Center for Real Estate, ODU Market Review and Forecast and here’s a glimpse into what’s unfolding, based on John M. Profilet’s report (and hopefully I took accurate notes!): Data reveals a 17% reduction in office needs, reflecting the evolving nature of workspaces in response to the remote work experience now in its fifth year. This evolution hasn’t diminished the importance of physical office spaces; instead, it’s reshaping them. The remote work era has transformed office spaces into more than just a place to work; they’ve become a tool for recruiting and retention. Employees returning to the office are looking for experiences they can’t find at home. They seek spaces that foster ‘collision dialogue’—serendipitous interactions that spark innovation and strengthen team dynamics. Adding to the optimism, Placer.ai reports an 18% increase in office visits over the past 12 months, tracked via cell phone data. This uptick is a clear indication that despite the rise of remote work, the office is evolving rather than disappearing. It’s becoming a destination where the physical environment adds value to the workday in ways that remote settings cannot replicate. The key to navigating this landscape will be in understanding these trends and leveraging them to create office spaces that are not just places of work, but destinations that offer unique experiences, foster creativity, and enhance productivity. #OfficeMarket #HamptonRoads #RealEstate #WorkplaceTrends #RemoteWork #ODU