The Marketing Technologies Transforming Commercial Brokerage | ACCESS THE REPORT→
Architecture - Daylighting

It Takes a Village to Create a Flexible Office

Industry leaders weigh in on the collaboration needed to create a truly flexible office solution

Last updated:

We are entering a new era of the office. That’s old news, already. What is still to be determined is what exactly the office will look like. Each passing day seems to unfold fresh ideas, innovative technology, and superior strategies around space utilization. As we emerge from the pandemic, it fascinates me to see the fresh new perspective companies have about their office. New ideas and solutions. New ways of doing things. New partnerships and conversations. It’s been a bit of a sad year, but many of us can feel the promise of recovery, the energy of innovation, and gratitude for collaboration. 

My friend Casey Myhre, co-founder of FastOffice, recently invited me to have a seat in their new virtual office using their new custom app designed by WELO. WELO is one of the innovators forging forward in the hybrid work environment by creating spaces where all colleagues can do their best work, be together and work seamlessly, whether working remotely or in the company’s physical office. I was excited to give it a try.

My first experience in this virtual experience was what a treat it was to feel like being in an office again. (I even said “Oh my gosh!” out loud). This virtual office can act as a digital twin to the physical office. When I’m not physically in the office I can still be represented and involved virtually. The rooms, furnishings and environment mirror my office. I can see co-workers and guests represented with their face and image. The environment allows me to speak to anyone in the office with a click of a mouse, connect on video instantly or request a meet up in the conference room. It feels alive!

As we had a really great conversion I started to feel the embers of true collaboration coming back. Even if you love remote work you have to admit that there is a vibe that’s been missing. It seems that some of that vibe can be replicated with a virtual platform. 

So here is one example of a digital platform that evokes emotion. But how will these digital spaces fit into our office life. For me, it represents not a replacement of the office but an extension of one. A way for people to interact with an office even if they are never able to set foot in it. 

There’s no doubt we will continue to see a distributed workforce tapping into a blend of locations from which to choose to work from: traditional, WFH, or some combination of the two. The key here is that offices are finding ways to be flexible to the broad spectrum of office needs. For many, this means a growth in the “flex office” which generally means shorter leases and more services.

But, as Vik Aggarwal, Founder of Flexibli, puts it, “Everyone is shouting: flex is good, flex is great, everyone should have flex. But what does flex really mean?” Vik reminded me that there must be a strategy as to when, where, why, and how flex fits. 

In most markets, there is now an eagerness for landlords to offer flexible space. Many say some type of flex should be available in every building, everywhere—and soon. 

These spaces generally fall into one of these buckets: spec suites, flex space, or co-working. The trend is furnished space, available with extremely flexible lease terms and move-in ready, almost on demand. This change, which has accelerated dramatically in the past twelve months, puts a strain on landlords to quickly figure it out and/or find appropriate partners.

I come at this conversation as one of those partners. At CORT we have been a proponent of flexibility for a long time. A flexible office solution means flexible furniture, which is where we see our company coming into play. But I know that it isn’t only me having this conversation with landlords. So, I wanted to take some time to understand where others in the space stand. What I learned has me more bullish than ever on the flexible office. 

Antony Slumbers has long been a vocal proponent of the industry adopting space-as-a-service. What’s his view on changes in space utilization? “In terms of the workplace, the next few years are not going to be a continuation of how things were pre-pandemic. Businesses are now acutely aware that for most of their people, the ‘office’ is not something that is needed to get things done.” 

In terms of the workplace, the next few years are not going to be a continuation of how things were pre-pandemic. Businesses are now acutely aware that for most of their people, the ‘office’ is not something that is needed to get things done.

Antony Slumbers,  PropTech strategist

Yes, that’s a reasonably disruptive statement, but I agree with it. More than ever, we must stay open-minded, informed, creative, and brave as newness surfaces in how, when, and where we work. 

Antony went on to say, “The absolute key to a successful workplace in the future will be understanding what those wants, needs, and desires of a workforce are. There will be no progress without this understanding. None.” 

So how are office providers trying to understand what the market wants? I checked in with Bryan Koop, Senior VP at Boston Properties, a man who seems to overflow with enthusiasm and a long-time leader in bringing flex space strategy front and center. For a couple of years now, I’ve had this article about Boston Properties’ flexible service on my bulletin board. Why? Because like many, I believe in and am committed to the future of flexible space and my company’s role in supporting its growth.

I asked him for his perspective. “We already see an increase in tenants looking for flexible space, even inquiring as far out as late 2021,” he said. “Our clients are considering all options for repopulating the workplace post COVID. Space-as-a-service is looking to be a tactical component to many corporate strategies.”

On Koop’s team is Sydney Rodenstein. She focuses on leasing efforts for Boston Properties’ FLEX product, so she’s right in the thick of things. “We’re finding great interest in our private, dedicated enterprise suites. The larger suite model continues to resonate with tenants compared to a more open ‘traditional’ co-working layout or hot-desking model,” she explained. In a post-covid world, where there is heightened attention and sensitivity to cleanliness, privacy, safety, and security, having an enclosed space seems to be especially important.

Speaking of bold statements, here’s one: “Space-as-a-service will be THE driving force of value in commercial real estate over the next decade, and beyond.” Understandably bold. But then again, it comes from Caleb Parker, the Founder of Bold and now part of Newflex. Caleb’s popular Work Bold podcast unites great thinkers and fabulous ideas around this topic and is a must for those wanting to understand better how SPaaS supports space utilization, building valuation, and represent the new way that offices are meeting market demand.

Space-as-a-service currently represents 6 to 10 percent of the overall CRE market today but is predicted to grow to 30 percent over the next decade. That level of growth will change commercial real estate forever.

Caleb explains, “As soon as the pandemic is over and we’re no longer concerned with maintaining social distancing, I believe we’ll see a high return to occupancy at first. But that feeling will wear off as people with longer work commutes choose to work from home several days each week. Many of us will work from home 2 to 3 days per week, if not more, and we’ll only come into the office when we need face-to-face time. Going forward, space needs to be repurposed for collaboration. This means often space will be underutilized unless someone else is using it when we’re not.”

Another personality in my network that I was dying to talk to about flex space is Liz Elam, Founder of GCUC. I love following her cutting-edge ideas and I really feel like Liz and GCUC are vital in helping this industry evolve. “You can no longer simply buy a building and expect to make money,” she told me. “Now you have to invest in that building and actually take human lives into account. People and companies will be self-selecting into healthy spaces.” Liz is banking that every building will have some form of co-working and/or flexible space. And, she’s not alone. 

Avison Young is a global brokerage that put a stake in the ground when it comes to all flavors of flexible space. I reached out to Charlie Morris, the Practice Group Leader for their Flexible Office Solutions group. I wanted to know why more big brokerages were not pushing harder into flex. His perspective on space utilization was this, “It is going to take a couple of years for the industry to get past our legacy portfolio management strategies and transition away from the current models which the occupier community has acknowledged is an issue,” he said. He explained that his firm estimated that the pre-pandemic workspace was utilized on average 50 percent of the time. Mid pandemic, it is likely only a fraction of that. This is why Avison Young created the X-Factor, a journey to help navigate their clients through a thinking process to improve the experience and utilization of space within their portfolios. 

In a recent blog post Avison Young made a fairly bold statement but one that I genuinely believe to be true. It stated, “if both the institutional owner and brokerage communities acknowledge the opportunities available in the market, leverage available flexible solutions and technology appropriately, we could, in fact, be facing the last down cycle where we have this amount of sublease space on the market.” It is easy to overlook but when you think about it on a purely economic level, one of the biggest costs to offices, for both owners and occupiers, is unused space. Finding ways to activate space at times when it normally would sit empty could create a huge amount of value for the commercial real estate sector, enough to help buffer it from future downturns.

I also talked to John Williams, Head of Marketing of The Instant Group. Their research indicates clients want to return to the office but certainly not all week, and with different levels of demand throughout the year. This means that we will have to better understand and provide flexibility for those times when more people than normal will want to come into work. “I think both occupiers and providers of space need to become used to irregular demand and ‘surges’ in requirements for space,” he said. 

I think both occupiers and providers of space need to become used to irregular demand and ‘surges’ in requirements for space.

John Williams, Head of Marketing for The Instant Group

John told me that suppliers of office space, whether landlords or third parties, will have to cater for these swings of demand as the idea of wasted or under-utilized space would be unacceptable in a post COVID world. Clients want efficient use of space, and that requires smart investments, not large front-end costs. The supply side of the market has to figure out how to cater to this mix of space to give clients options. 

I know first-hand that many landlords seek new solutions to add value to buildings and accelerate leasing activities by offering the type of space now in demand, short-term and flexible. Last week I had the privilege of working with Addie Ludwig of Cawley Partners in Dallas. It’s so refreshing to see open-mindedness and curiosity from landlords. I appreciate the exploration required from teams like Addie’s as they adjust to different occupier expectations. 

Her view on space utilization is that many companies already had a flexible work model with much common space and a focus on wellness. “We believe we will see the work from home model continue for a larger percentage of employees than we saw pre-pandemic, but long-term impacts of this will be negative. Companies will want their people back in the office for not only productivity but for culture and growth as well.’’

Addie went on to say, “We are seeing an increase in companies wanting flexibility. However, this has largely been due to the fact that many companies are in a ‘wait and see’ mode. Because of this, we have explored partnerships to create flexible furniture options for people looking at our buildings.” As someone in the flexible furniture world, this was music to my ears. 

The first step of recovery is acceptance. If we acknowledge that how we use space is changing, then we can find ways for offices to be designed to accommodate it. But, no one can make this journey alone. All of the players in the office industry need to work together, by partnering, collaborating, and integrating their technology, in order to create solutions that cater to the new market wants and needs. There has been a lot of doom and gloom around the future of the office but I think that is a short-sided view. Sure, there will be less demand for traditional offices. But, if the industry bands together, we can create and provide the services that companies will find valuable long after the pandemic is just a distant, unpleasant memory.

Have Another
Five Companies Returning to the Office (and Five That Aren’t)