Embracing Flexibility

As the commercial real estate sector undergoes significant transformations, particularly in the office space segment, it has become evident that office landlords and asset owners need to adapt to accommodate the new world of work. One emerging trend is the increasing partnership between office landlords and coworking and flexible office operators. This collaboration aims to address the evolving demands of businesses and provide agile and adaptable office solutions to keep assets relevant into the future. 

In this blog post, I share the changing dynamics of the office market and the role of flexible office and coworking spaces in shaping its future.

In simple I see us operators as a three headed monster:

• We’re a Tenant

1. 1. • We occupy and pay rent accordingly

• We Are Your leasing Partner

1. 1. • We work alongside and in partnership with agencies to help them with their clients and introduce them to the world of possibilities.

• We Are The Service Provider To Your Asset

• • • Flexible office space to scale up and down into
    • Coworking space for overflow
    • Meeting Rooms (by the hour, day, week, month)
    • Training Rooms (by the hour, day, week, month)
    • Event Spaces for off-sites / conferences / team sessions / wellness
    • Breakout Space to just change things up for a few hours (or more)
    • Cafe (fuel for your day)

The Changing Landscape of Commercial Real Estate

In recent years, the office market has faced challenges due to the shift towards remote & flexible work. Assessments provided by institutions such as Capital Economics, PwC, Morgan Stanley & the big four Banks, offer varying perspectives on the state of commercial real estate. While some predict declining prices and increased defaults, others believe that challenges can be managed and opportunities can still be found in the market.

Partnering with Coworking and Flex Office Operators

In response to these market dynamics, office landlords and asset owners are recognising the need to partner with coworking and flex office operators. These partnerships offer several benefits, including:

Access to Expertise and Resources

Established flexible workspace operators bring valuable insights on space utilisation, design optimization, and community building. Their expertise can help traditional office spaces adapt to the changing demands of businesses and the workforce.

Leveraging Networks and Memberships

Flexible workspace providers have diverse client bases, attracting freelancers, startups, and large enterprises. Partnering with them allows office landlords to tap into their networks, creating a vibrant ecosystem within office buildings and offering tenants access to a broader range of amenities and networking opportunities.

Agility in Responding to Market Trends

Flexible workspace operators possess the operational flexibility and expertise to adapt quickly to evolving needs. They can incorporate new technologies, implement hybrid work models, and offer specialised services, enabling office landlords to respond effectively to market trends and changing tenant demands

I wrote an open letter to Landlords & Asset Owners with more detail. With that tho you don’t need to take my word and experience for it, here are some key office market statistics that reflect the growing significance of flexible office and coworking spaces in the office market:

• Global Growth: The global flexible workspace market was valued at approximately $26 billion in 2020 and is projected to reach $111.68 billion by 2027, with a compound annual growth rate (CAGR) of 24.2% during the forecast period (2020-2027).
• Increased Demand: Flexible office space demand increased by 10% in 2021, compared to pre-pandemic levels, driven by the rise of remote work, cost-effectiveness, and flexible lease terms.
• Occupancy Rates: Despite the disruptions caused by the pandemic, the average global occupancy rate for flexible office spaces remained around 67% and was reflected here at CreativeCubes.Co
• Market Share: Flexible office space accounted for approximately 3% of the total office market in 2020 but will surge towards 30% over the next decade, representing a substantial increase compared to previous years.
• Corporate Adoption: Around 40% of global corporate occupiers plan to incorporate flexible office space into their real estate portfolios, highlighting the growing acceptance of flexible workspace options that they want to offer to their staff and teams
• Hybrid Workforce: 71% of global corporate real estate executives expect to adopt hybrid work policies, driving the need for flexible office solutions that accommodate employees splitting their time between home and the office.

The office market is experiencing a transformative shift, and office landlords and asset owners must adapt to meet the changing demands of businesses and the workforce. Partnering with coworking and flexible office operators offers a pathway to embrace flexibility, enhance tenant experiences, and capitalise on evolving trends. By leveraging the expertise, networks, and operational agility of these operators, office landlords can position themselves

My team and I at CreativeCubes.Co are here to help! We’re built for scale and have already partnered with a bunch of landlords and asset owners to bring flex, energy, service and excitement to some incredible properties to date.

Reach out if we can help you

Tobi.