The office space market is shifting dramatically to meet the needs of tech companies and others. Understanding this shift is critical if investors want to capitalize on the commercial real estate office flex space trend.
What Is Flexible Office Space?
Flexible office space is space rented to a tenant for a term less than the typical five to ten years, and it could be rented for as little as one day. The rental space can be furnished or unfurnished, and it can even be as limited as offering available desks in existing offices.
The primary users of flex space are tech firms, whose business plans can change quarterly, but other users include consulting and finance firms.
“The dynamics of office have really changed when tenants can walk in with their own laptops and their own phone and suddenly the whole reason for having an office changes,” Andy Liverman [director of product marketing for LiquidSpace] said. You can now work in some ways wherever you want. Landlords are recognizing that.”
City Cores Are Popular
Some companies are finding that to attract the workers they want, they need space with amenities in a city’s core. This allows companies to cater to the millennial workers that they are trying to attract. Popular buildings for such space include those with an interesting history or desirable architecture.
The trend began in New York and San Francisco due to their ever-escalating rents, but it is spreading to other high-growth areas hoping to attract tech firms, including Arizona, and Phoenix in particular.
If you need help considering how you might make the most of this trend, Mitch Korrub, principal/owner of Royal Commercial Real Estate LLC, can provide the guidance you’re looking for. He believes that his clients are best served by an individual approach that considers all of the client’s business needs and financial goals as opposed to the one-size-fits-all template that is employed by many firms today. You can reach him at 480-253-9431 or mkorrub@royalcre.com.
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