Flex Space Demand Expected to Boom in 2022
The commercial real estate market continues to adapt to the pandemic environment. This article by Lynn Pollack with Globest.com features information indicating that flex space in offices will boom in 2022. She provides data from a team of Colliers analysts with their predictions. The point is made “How occupiers interact with a building will be fundamental to real estate decision making. Providing high-quality tenant experience is becoming essential, particularly for Grade A and trophy buildings. We expect more specialist operators to emerge into this space, together with hospitality operators stepping in and flexible workspace providers pivoting towards it.”
If your company is looking for a commercial real estate
strategy that includes the right amount of flex space, contact me. Cresa experts understand how influential the
right work environment can be and will work with you to develop a space that
enhances productivity and innovation. Whether optimizing your current
workspace, creating a new design, or helping with relocation and
decommissioning strategies, we’re committed to enhancing the way you work.
Flex Space Demand Expected To Boom In
2022
Increased institutional interest is creating more
transparency, which will aid in the maturity of the sector.
By Lynn Pollack | January 31, 2022 at 07:13
AM
The “work from anywhere” trend will continue to pick
up steam in 2022, a team of Colliers analysts predicts, with some imbalance to
be expected between car-dependent secondary suburbs and dense urban
cities.
That’s good news for the burgeoning flex space sector: while
office occupancy levels in cities like Dallas and Houston have reached more
than 40%, utilization rates are closer to 15-20% in dense urban centers like
Manhattan and San Francisco. The very nature of office work is undergoing a
“sea change,” according to Colliers, with work patterns shifting to a more
hybrid model and employees demanding more flexibility about where they work.
“While operators have largely regeared their agreements with
landlords over the last 18 months, user interest in flexible workspace has
expanded as firms reassess their occupational portfolio needs in the light of
the COVID-19 pandemic and ongoing shifts in work patterns,” the report notes.
“Owners are being much more creative in their approach to delivering flexible
workspace solutions by carefully looking at their product mix and delivery
models. Concurrently, increased institutional interest is creating more
transparency, which will aid in the maturity of the sector.”
Colliers predicts a greater emphasis on user experience
going forward, as owners look to provide an extensive suite of quality
amenities to elevate the tenant experience by either providing services
in-house or outsourcing to trusted partners in areas like fitness, wellness,
hospitality, technology and flexibility. But “having one operator allows
for better integration of amenities, helping create a seamless experience for
the end user,” the report notes.
Colliers also predicts more attention will be paid to
content creation and programming, both of which are “critical to engagement”
with end users.
“How occupiers interact with a building will be fundamental
to real estate decision making,” the report notes. “Providing high-quality
tenant experience is becoming essential, particularly for Grade A and trophy
buildings. We expect more specialist operators to emerge into this space,
together with hospitality operators stepping in and flexible workspace
providers pivoting towards it.”
As the physical work environment evolves to meet customer
demand, expect the line between flex space and traditional office offerings to
blur and become more holistic. These days, flex space is increasingly viewed as
a need-to-have, not a temporary solution.
“Asset owners are increasingly adding components of flexible
workspace to their product mix and engaging in creative delivery models to
provide for occupier demand,” according to Colliers. “Turnkey suites are
becoming more prevalent as landlords look to capture behavioral changes in
occupier demand and some are continuing to develop their own flex products.”
Against that backdrop, Colliers predicts more product
offerings will be on the horizon this year, and the flight to quality assets
will continue.
Big changes are also expected this year in how flex space
operators earn revenue. Research late last year from Yardi Matrix predicts that
franchising and management agreements with revenue sharing will become more
common. In management agreements, landlords are typically responsible for
the cost of fit-outs but can receive a larger share of the revenue from
operators.
End of Article
If you have significant questions about your current real estate strategy, it may be time for a discussion. Once we have started our conversation, we can create a strategy to look at your business operations and current space and then craft up a plan to find something that is a great fit in the area. With the current vacancies and inventory, we will work with you to get the best deal. We represent tenants ONLY, so you can feel comfortable that we are working for your business 100%. If we can help you by being your tenant broker in the DC, Maryland, or Northern Virginia area, visit my website or call me at 301-841-6542. Make sure to follow all my social efforts by clicking on the links below.
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301-842-6542
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