Many occupiers are increasingly using flexible office space as part of a programmatic strategy that allows them to maximize their long-term commitments while also minimizing their risk of having too much or too little space as headcount fluctuates.
Implementing more flexible approaches allows companies to remain nimble in the face of the current economic situation and the profound shift in workforce behaviour—both of which are still in flux. This strategy, when delivered under the appropriate structure, offers occupiers the opportunity to ensure their headcount requirement, improve their financial performance and reduce capital expenses.
Given today’s uncertainty around headcount and utilization projections, it is smart to develop solutions under the assumption that the future is unknown, and flexibility is required. Instead of asking whether demand projection is uncertain enough to warrant flexibility, companies should change their perspectives to ask whether their headcount projection is solid enough to make a long-term commitment.
Making a long-term commitment based on more real-team space needs can be supplemented with flex access within the building or the nearby area. Should headcount grow or the need for additional overflow and meeting space arise, flex space can accommodate it.
When flex is not viewed as a standalone solution, but rather as a piece of a holistic portfolio strategy, it is not uncommon to realize savings of between 25% and 30%.
Just as cloud computing and ride sharing have transformed legacy industries, flexible office space is transforming commercial real estate.
Each type of flexible space option aspires to offer the right space at the right time, with little waste. With utilization rates becoming a more common measure, occupiers are becoming more aware of how much space goes unused and the associated cost of that underutilization. Underutilized space (no matter how inexpensive) is not a good use of funds. An agile real estate strategy can provide a productive, efficient, and flexible real estate portfolio that allows occupiers to match commitment terms with the level of business uncertainty.
With this increasing array of truly flexible alternatives, there has never been a safer time to be wrong about future space usage. Occupiers now have the luxury of adopting a wait and- see approach, rather than making long-term decisions that will create long-term cost challenges. Those with truly agile portfolio strategies will adopt new practices, such as mapping proximity and availability of flex locations as an extension of their existing portfolios. As new headcount requirements, utilization patterns and location strategies emerge, companies can use flexible space options to quickly provide business solutions. This is a fallback strategy that has not been available in previous cycles.
For further information on restructuring office space, contact Mike Young or visit or our website.
Or for the full report: Real estate reset: 8 core truths, click here.
Read other articles in the series:
Resetting Real Estate Strategy: Location - A series of core truths guiding the future of work (part 2 of 6)
Resetting Real Estate Strategy: Design and Experience - A series of core truths guiding the future of work (part 5 of 6)