To say the least, the past two years have forced companies (big and small) to re-evaluate their real estate portfolios. Some have gone fully remote, while others are working on a hybrid strategy while decreasing their real estate footprint, so what does that entail? For many, it means incorporating a flexible office space (Flex Space).
Corporate leaders are embracing new ways of organizing the office – looking for data-driven solutions that are cheaper, more efficient, and flexible. With real estate being one of the largest expenses, businesses stuck in multiple-year leases found themselves in hot water when their employees couldn’t leave the house. Their revenues were decreasing, but their real estate expenses couldn’t follow suit if they were contractually obligated to keep paying for a lease that wasn’t being utilized. We talked about it in-depth with industry leaders during our “Work from Anywhere” webinar. Keep reading to learn the ins and outs of Flex Space, and why it may be a worthwhile solution for your business.
A Flex Space is a form of CRE with a mix of office + warehouse/retail. Typically, it is a large warehouse with a portion of it built out as office space with a shorter lease than a traditional commercial lease agreement. The modern workspace continues to evolve to create the most optimal situation for companies and their employees.
The evolution can be hard to adapt to, especially for older companies, and it can be even harder for businesses to know if they should adjust their CRE strategy to include more Flex spaces. Flex spaces are growing in popularity as corporate occupiers search for more convenient, cost-effective solutions that can easily shift from one purpose to another if needed.
Now that you know what it is, we’ll help you understand its true value to know if it is the right move for your business.
Flex spaces can be very beneficial to companies looking to be mobile and grow quickly. As the name suggests, most of the benefits arise come from its flexibility compared to a traditional office lease. A few reasons to get you thinking about a Flex space:
The upfront costs that arise from setting up a new (traditional) corporate space will put a dent in your bottom line. There’s furniture, design costs, renovations, to name a few – and don’t forget about the massive time spend on each of those projects. The only main expense you’ll have to worry about with Flex space is rent – which is typically lower than a traditional office depending on your market.
A shorter lease term gives your business more wiggle room when things don’t go your way (re: the past two years). No one wants to pay for an office that isn’t being used. With these shorter lease terms (1-3 years), you’re less bound to a space that isn’t working anymore.
Not everyone likes working from home. A Flex space grants a sense of community for your team – with their fellow employees and sometimes with other companies if it’s a co-working space or you’re sharing it with another business. The shared workspace encourages networking and sharing of ideas. This can range from having a shared happy hour with a neighboring company to discovering a partnership that you wouldn’t have if you weren’t in the same space.
Transitioning to a Flex workspace grants your business the opportunity to grow (or shrink) depending on your circumstances. If your headcount is increasing more than your space allows, you can easily grow your real estate footprint in a Flex space. On the other hand, if you decide to let some teams work from home, a Flex space has you covered and you quickly find a smaller space.
Flex spaces may not be right for every business. In many cases, they won’t have the “frills” that a traditional Class-A office space can offer, but it’s important to think about which of those frills your business actually uses – and which the landlord offers as an explanation for higher rent.
Flex spaces can be a significant benefit if you want to customize your space without overspending, remodeling, and carrying multiple long-term leases. Do the four reasons listed above apply to you? We’ve got plenty more, and RefineRE’s FLEX solution is a great place to get started.
While commercial MLS sites like LoopNet or CoStar are useful, it’s easy to get lost in the weeds of the thousands of listings they have – many of which that don’t apply to you. Within the RefineRE Suite, our FLEX solution is an invaluable resource to get you started on the decision-making process.
We will identify corporate real estate leases that are prime candidates for a flexible working strategy, comparing your real estate data with our national database of coworking locations to identify cost savings. We’ve already helped a technology provider save 49 days/year in commute times by utilizing decentralized flex offices and optimizing specific teams and business units for remote work.
Within our Flex Module, we have two main features:
Ready to start flexing? Contact us to set up a brief 15-minute call where we will show you how we can get you on the data-driven path to cost savings.