The Evolving Workplace & The Commercial Office
of CRE teams in the commercial office sector say that at least some of their tenants have adopted a hybrid work model
Hybrid Work is Here to Stay
It should come as no surprise that, according to our research, 89% of CRE teams in the commercial office sector say that at least some of their tenants have adopted a hybrid work model (defined as employees splitting time between the office and working from home).
A Big Opportunity
Flexible space – also known as “flex space”– has become a hot topic in the CRE industry. Landlords are looking for new ways to utilize and draw additional revenue from their buildings as they face the possibility of shrinking leases and diminished renewals.
Yet, our research shows a huge opportunity for commercial office teams. Most respondents (46%) said they aren’t sure what percentage of their rentable square footage (RSF) they will change to accommodate flex space over the next two years. Implementing flex space is a top way for CRE property teams to create buildings that can easily adapt to fit tenants’ changing needs and demands.
What is Flex Space?
Flex space is any commercial real estate that offers a space for multipurpose workspaces to meet business needs.
By 2030, 30% of office space will include some type of flexible space, according to the Global Flex Space Report from JLL. In 2021, flex space accounted for 3.6 million square feet of leased space, according to JLL research.
CRE landlords can offer office space with flexible (and in some cases, shorter) lease terms. For example, the space could comprise smaller suites grouped together by shared areas such as conference rooms or kitchenettes. Tenants can tailor the space to their needs. For instance, some tenants will seek out flex space as they solidify their hybrid work plans. That means they’ll need more flexibility because the number of people using the office space at any given time is always changing.