Archilogic helps office providers promote and sell office space through 3D floor plans, office design simulations and property data insights. Here we look into how the rise of flexible co-working spaces and short-term leases will impact the daily life of office space and commercial real estate brokers.
The office market has changed dramatically over the past decade. Whether you blame technological, cultural or economic changes, all these currents have converged to sweep away traditional expectations and bring in a new way of working.The rise of remote working has seen office space per worker fall by 50% since its peak in 2009. But smaller square footage is not the whole story. Companies can’t just halve their workstations and carry on as before; the new normal demands flexibility.Employers need to accommodate their variable workforce while managing their own costs and capital requirements. The ability to respond to an ever-changing market is also crucial. “Agile” is the word of the day in commercial real estate – which rules out the traditional five-year lease structure and introduces workspace as a service. Much has been made of the rise of coworking spaces. But not every short-term tenant is looking for a day-to-day managed model.
It’s not just a choice between coworking and traditional leases. Some operators have seen an opportunity in the demand for shorter, more flexible leases , stepping in with a simple way to rent anything from a few desks to a basic furnished but unmanaged office. And then there’s the issue of the actual layout.
With faster turnover, landlords need to ensure their space can be readily adapted to each new tenant – there’s no time or money for extensive fit-out. Then, too, the tenants themselves often have rapidly evolving needs. Combine that with the post-open-plan startup culture , in which employees often don’t stay at assigned desks, and you can see how flexible workspace is the next big thing.
Office designers need to plan for change – with modular walls, open spaces that can be easily adapted to a variety of uses, and so on. Layouts can be tested using 3D floor plan technology to ensure they’re fit for purpose, whatever that purpose may be. And this proven adaptability will become a big selling point, as well as a key advantage for landlords.
What does all this mean for real estate brokers? Yet more pressure. With fewer big deals on the table, brokers have to work harder to chase smaller deals, putting in more hours for less money. And shorter leases mean faster turnover and more competition.
Working smart means understanding that the game has changed, and leveraging the new rules to advantage.
Whether the client’s priority is flexibility or costs, short-term leases create an opportunity to shift the business model. A streamlined sales process, using software to deliver the data needed and answer questions before they arise, will keep agents ahead of the curve.