A year after COVID-19, the world looks forward to a more normalized 2021. Hope is clearly on the horizon as the vaccines roll out worldwide; now is the time to take a look at what the future of the office will look like. The data tells the story that a major shift to flexible office space is underway.
A recent tenant survey from CBRE indicates that 86 percent of respondents see flexible office space as a critical component of their future real estate strategies. (Even before the pandemic, experts predicted that by 2030, 30 percent of commercial office space is predicted to be flex space.)
According to a recent Instant Office Report, only about one percent of current commercial real estate is flex space.
The Commercial Observer estimates that coworking spaces are likely to double or triple in the U.S. in five years.
The pivot to hybrid will be powered by flexible workspaces; a November 2020 report from Colliers International confirms that inventory for flexible work spaces has increased by 36.5 percent in just 18 months.
Predicted rise of flexible work spaces
It makes sense; landlords are eager to fill empty spaces with paying tenants, and corporations and employees are weary of 100 percent remote working that can negatively impact workplace culture, productivity, and spontaneous creativity. Because we understand that remote work is feasible and the in-person office work is valuable, the hybrid model is here to stay.
The new reality for the office is precisely the reason that I started my new position as CEO North America for essensys. I understand the tremendous potential for shaping the future of the office and I am passionate about delivering a tool as powerful as flexible space as a service to manage the necessary changes of future proofing commercial real estate assets. My background is both real estate and technology so this position is the perfect blend of my skills and experience.
In my view, the most profound change in office space from this year is the power shift from corporations dictating how office space is designed and managed to a model that recognizes that the individual needs of each worker must be at the center of the office experience. COVID accelerated underlying trends such as remote working capabilities and the move towards flexible real estate products. It has forever changed how, where, and when a global workforce collaborates and gets work done.
In 2021, even with a vaccine, many will not be returning to the office for the structured five-day in-office schedule from 9 to 5. The new normal in office space is hybrid, and commercial real estate owners and operators will have to pay attention to these trends:
Flexible Office Space
The new normal in office space must shift from a long-term, physical product to a service-focused asset model to accommodate high transaction volumes and to respond to tenant requirements for flexible options such as coworking, private offices and shorter-lease terms. Most landlords aren’t standing still. They are increasingly considering flex models – whether that means utilizing their internal teams or partnering with third party operators. The reality is that running a flexible workspace operation is not one-size-fits-all and it is very complex. Technology is a key component to enabling flexible, move-in ready office assets that help landlord’s offerings stay relevant and ultimately increase tenant’s productivity.