A new survey from The Instant Group, a workspace innovation company, and the global architectural firm HLW, asked co-working operators, landlords and corporate and private occupiers how a flexible workspace approach impacted their businesses.
The survey, based on more than 500 responses, found that companies using flex space felt agility was the greatest value, allowing them to assign employees to a space on short notice, as well as easily expand or reduce the amount of space at any site when needed. They also cited added benefits, including reduced real estate costs, flexibility and greater productivity.
The survey also found that while company respondents were neutral about the brand of a flex space operator, nearly half (42 percent) want elements of their own brand in the space they occupy. The report’s authors suggest that this is an area operators need to address to broaden their appeal.
“Choice of an operator brand is geographical, because there aren’t many national or global co-working operators like WeWork and Spaces on the scene yet,” says Ryan Hoopes, Dallas-based senior associate at real estate services firm Colliers International, who heads the firm’s global flexible workspace advisory practice.
The survey found that landlords, on the other hand, are concerned with an operator’s brand, as they believe the presence of flex space might impact their buildings’ value and that an operator’s brand may contribute to the building’s worth.
Hoopes says that there is debate around whether the presence of a flex space operator does, in fact, boost the value of an office building, and suggests it depends on the buyer. “We are on the side that believes that while it may currently not add value from a capital markets standpoint, it almost certainly adds significant intrinsic value to an asset that will translate much better as the flexible workspace movement builds,” he notes.
The survey found that the number one driver for landlords to add a flexible operator to their building is that it brings in new tenants. “Co-working space provides a low barrier to entry for small businesses and start-ups that may eventually grow into larger spaces of their own,” Hoopes says. “Co-working space is a product of businesses no longer wanting to make a long-term real estate commitment.”
He adds that a report from Deloitte’s Center for the Edge found that 50 years ago the life expectancy for a S&P 500 company was 75 years. Today it’s 15 years and declining.
End users of flex space said that flexibility and adaptability—the ability to choose where and when they work—have a positive impact on how they engage with work. Other benefits include expanding their professional networks, business opportunities and a greater feeling of energy. Nearly half of respondents (42 percent) expect to spend less time working in a traditional office setting in the future, but a larger portion of occupiers (55 percent) see themselves working from a variety of locations.
As a result, an overwhelming majority of flex-space occupants cited wireless connectivity and wireless security as the most important technology-related features in their workspace, as those factors support work flexibility.
John Williams, who heads marketing at The Instant Group, attributes growth in flex space to operators’ understanding that end users want community and experience and are catering to these desires. Borrowing from retail and hotel operators, he says they are creating workplace destinations, which represents a sea change in the office sector.
The report notes that the range of co-working and flex space has grown exponentially. As the market is made up of predominantly smaller operators, they are in a position of knowing their target audience well and can tailor their offerings accordingly.