The Future of Flex
The revival of the flexible office sector and its new role in serving the post-pandemic workforce.
- Scott Homa
- Alex Colpaert
- Christopher Clausen
- Jacob Rowden
- Lee Fong
After a period of unprecedented disruption in demand for office space, many tenants are emerging from the pandemic with the realization that in times of uncertainty, flexibility is the greatest amenity. Demand for flexibility in lease terms is rising. Tenants are increasingly requesting expansion, contraction and termination options in leases and are favoring short-duration commitments as they await greater clarity in business conditions and workplace strategies.
As the pandemic forces employers to make difficult decisions on the future of remote work, hybrid schedules and “work-near-home” programs, flexibility promises to be a critical element of long-term corporate real estate strategies.
Key takeaways:
- Office demand is shifting to flexible formats. Pandemic-related uncertainty, changes in employee preferences and tenants’ increased need for agility are driving a surge in interest for flexible space options.
- Landlords are incorporating flexibility and hospitality services into their portfolios to adapt to changes in occupier demand. Integrating flexible space into buildings creates synergies by driving foot traffic, incubating leasing prospects and providing amenities to tenants.
- Investors should take calculated risks as they await data on operating performance, asset pricing and liquidity. Innovative new deal structures are being introduced that mitigate risk, maximize return potential and confer greater control of space and customer relationships to landlords.
