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Flexible Office: A Component of Occupier Space Strategies | US | Cushman & Wakefield

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<!-- BEGIN NOINDEX --> <section class="container"> <nav aria-label="breadcrumb"> <ol class="breadcrumb js-breadcrumb"> <li class="breadcrumb-item js-breadcrumb-item"><a href="/en/united-states">United States</a></li> <li class="breadcrumb-item js-breadcrumb-item"><a href="/en/united-states/insights">Insights</a></li> <li class="breadcrumb-item js-breadcrumb-item active" aria-current="page">Flexible Office: A Component of Occupier Space Str...</li> </ol> </nav> </section> <!-- END NOINDEX --> <section class="container" style="" > <div class="theme-darkblue"> <div class="hero mix_hero-image js-hero"> <img class="d-none d-md-block image-resizing h-auto" alt="Flex Office" src="https://cw-gbl-gws-prod.azureedge.net/-/media/cw/americas/united-states/insights/research-images/2024/flex-occupier-article-banner-1.jpg?rev=3727b669c5944bb19394250f96b28e96" width="1488" height="360"/> <img class="d-block d-md-none image-resizing h-auto" alt="Flex Office" src="https://cw-gbl-gws-prod.azureedge.net/-/media/cw/americas/united-states/insights/research-images/2024/flex-occupier-article-2.jpg?rev=e364d713f1e0497190a65ab852d599c7" width="366" height="234"/> </div> </div> <div class="page-title" data-dttype="InsightDetailPage"> <h1 class="page-title-main">Flexible Office: A Component of Occupier Space Strategies</h1> </div> <div> <div class="page-content-body rich-text"> <h2><span style="color: #1d1740;">Key Takeaways</span></h2> <div class="sidebar mix_keyFeatures"> <ul> <li>Growth by number of locations and total square footage continues in the sector. However, providers are taking smaller spaces with shorter terms.<br /> <br /> </li> <li>Occupiers continue to lean on the flex sector to provide distributed employees a place to work that fosters a &ldquo;sense of community&rdquo; that includes collaboration, relationships and socialization spaces.<br /> <br /> </li> <li><a href="https://www.cushmanwakefield.com/en/united-states">Cushman &amp; Wakefield and CoreNet&rsquo;s survey of office occupiers</a> showed that by 2029, 20% of their global workforce will be using coworking space, an increase from the current 16%.</li> </ul> </div> <p> Despite challenges in the last few years, the number of flexible office (flex) spaces in the U.S. has increased. Based on recent data from Coworking Caf&eacute;, the number of flex spaces in the U.S. increased 6% quarter-over-quarter (QOQ) in the first quarter of 2024<sup>1</sup>. Additionally, the total size of the flex market, by square feet (sf), grew by 10% QOQ in the first quarter of 2024 after falling 3% in the fourth quarter of 2023. <iframe src="https://e.infogram.com/8353de10-db7e-46b6-ac8f-94b7de193181?src=embed" title="Flexible Office Market - 1" width="1170" height="484" scrolling="no" frameborder="0" style="border:none;" allowfullscreen="allowfullscreen"></iframe> <br /> <br /> Cushman &amp; Wakefield data shows that leases signed between 2020-2024 by the top 10 largest (by square footage) flex office providers differ significantly from their pre-pandemic activity in both quantity and size. A total of 720 deals were signed between 2015-2019, totaling over 29 million square feet (msf). This fell to 130 deals between 2020-2024, totaling 3 msf. The average lease size from 2015-2019 was just under 41,000 sf, but that number dropped by nearly half to 24,000 sf from 2020-2024. Lease length also differs when comparing the two periods. Leases averaged 11 years between 2015-2019; that fell to 8 years from 2020-2024. Additionally, two-thirds of deals signed between 2015-2020 were for 11 years or more, and that share fell to 45% from 2020-2024.<br /> <iframe src="https://e.infogram.com/faf556fe-fd6d-4f22-ac06-e765932f1d2a?src=embed" title="Flexible Office Market - 2" width="1170" height="459" scrolling="no" frameborder="0" style="border:none;" allowfullscreen="allowfullscreen"></iframe> To address demand, the top ten providers scaled up their platforms from 2015-2020, and they have spent the last four and a half years right sizing their portfolios to meet their occupier&rsquo;s evolving needs. The flex sector has faced many headwinds, from economic turbulence to major provider defaults, yet it continues to grow due to flex providers&rsquo; ability to meet the diverse needs of occupiers and their employees with people-focused solutions, adaptable&nbsp;<span style="font-size: 1rem;">workspaces, amenities and flexible lease terms.</span></p> <img src="https://cw-gbl-gws-prod.azureedge.net/-/media/cw/americas/united-states/insights/research-images/2024/purpose-of-office-circle-graphic.png?rev=7d89cf1608624c0097b88cea5981d910&amp;hash=E2D0ECEA202AF0F191B3D1516B76D0BA" alt="Purpose of Office" style="height: 325px; width: 325px; float: right; margin-bottom: 5px; margin-left: 5px;" /> <h3><span style="color: #0093ad;">People Focused Solutions</span> </h3> <p>Occupiers and their employees choose flex solutions primarily for the quality of service. In other words, it is first and foremost about their people. Various data sources highlight the people-centered benefits of flex solutions, including a survey by The Instant Group that found the main reason customers choose flex is &ldquo;greater productivity due to multiple work environments,&rdquo; followed by &ldquo;friendly staff&rsquo; and &ldquo;fostering a sense of community.&rdquo; This aligns with Deskmag&rsquo;s recent report, which found that &ldquo;sense of community&rdquo; was among the top three expectations providers had for their business in 2023.<sup>2</sup> <a href="https://www.cushmanwakefield.com/en/united-states/insights/experience-per-square-foot-instant-insights">Cushman &amp; Wakefield&rsquo;s Experience per Square Foot&trade;</a>&nbsp;survey revealed that employees identify the top three purposes of the office as people focused. Employees value a sense of community and connection as key motivators to go to the office. Flex solutions, which provide spaces tailored to individual needs, play a crucial role in many occupiers&rsquo; ongoing space strategies for their employees.</p> <h3><span style="color: #0093ad;"><br /> Spaces for How People Work</span></h3> <p>While employees value collaboration and spaces that promote socialization, most employees need space to complete individual work throughout the day. Research by&nbsp;<a href="https://www.cushmanwakefield.com/en/united-states/services/total-workplace-consulting" style="background-color: #ffffff;">Cushman &amp; Wakefield&rsquo;s Total Workplace team</a>&nbsp;found that office workers spend most of their time on individual work and virtual meetings.<sup>3</sup>&nbsp;Based on&nbsp;<a href="https://www.cushmanwakefield.com/en/united-states/insights/experience-per-square-foot-instant-insights" style="background-color: #ffffff;">Cushman &amp; Wakefield&rsquo;s Experience per Square Foot&trade;</a>&nbsp;survey, employees spend 54% of their time on individual work and 21% on virtual meetings or calls. Flexible offices provide spaces designed to accommodate the different daily activities of employees, including spaces for individual work and virtual calls, as well as areas for team meetings, collaboration and socializing. Flex providers are adept at navigating changing employee workplace trends and tailoring solutions that best serve different work styles. Providers routinely implement new and innovative ideas to support an occupier&rsquo;s specific space strategies, such as creating custom spaces, deploying technology solutions, and adding new furniture. Additionally, flex providers routinely create communal events like speaker sessions, networking opportunities and wellness workshops to enhance the employee experience.&nbsp;</p> <iframe src="https://e.infogram.com/_/JLFES9gbfVG8HmUXVbGw?src=embed" title="Flexible Office Market - 4" width="1170" height="467" scrolling="no" frameborder="0" style="border:none;" allowfullscreen="allowfullscreen"></iframe> <h3><span style="color: #0093ad;"><br /> Tailored Solutions for Varied Workforce Requirements</span></h3> <p>The popularity of hybrid work has driven the demand for flex space solutions, especially for occupiers with distributed workforces who need spaces outside traditional office markets. According to a recent amenities analysis by The Instant Group,<sup>4</sup> the top searched amenity over the last five years was &ldquo;furnished.&rdquo; However, in 2023, this shifted to &ldquo;24-hour access,&rdquo; reflecting the changing work styles and evolution of the typical workday. Today&rsquo;s employees have more flexibility, often working at different times and in various locations. The rise in parking as a preferred amenity reflects in increasing preference to work close to home. According to Gallup data, commuting time increased by 10% between 2006 and 2019, making long commutes a significant reason employees resist returning to the office full time and favor easily accessible and convenient locations.<sup>5</sup> Flex offices meet this employee preference by providing workspaces closer to employees&rsquo; homes, with the amenities they need.<br /> <br /> <iframe src="https://e.infogram.com/_/Gh2EDIo2auQ7JHYX7zBj?src=embed" title="Flexible Office Market - 5" width="1170" height="390" scrolling="no" frameborder="0" style="border:none;" allowfullscreen="allowfullscreen"></iframe> </p> <h3><span style="color: #0093ad;">Flexible Terms Focused on Occupier Needs</span></h3> <p> The Instant Group analysis revealed that &ldquo;flexible term&rdquo; is a top-searched amenity, highlighting the rising popularity of flexible leases from flex providers. Occupiers increasingly seek flexible leases that fit with their evolving space strategies amid continuing uncertainty around future workforce operations. Flexible leases also support potential cost-cutting and cost-containment strategies by allowing occupiers to select office space &agrave; la carte. Flexible terms are also beneficial to occupiers in scenarios where a location may need to be shuttered, but employees still require some access to office space. In these cases, flex solutions can support the needs of dispersed office users by providing the occupier with flexible terms and multiple types of office space.</p> <h3><span style="color: #0093ad;">Continued Growth</span></h3> <p> In a recent <a href="https://www.cushmanwakefield.com/en/insights/what-occupiers-want">CoreNet and Cushman &amp; Wakefield survey of office occupiers</a>, most felt that their workforce will increasingly utilize flexible office solutions on a regular basis. Survey respondents indicated that about 12% of their global workforce used coworking spaces five years ago. Today, that percentage has increased to 16%, and it is expected to grow to 20% by 2029. <iframe src="https://e.infogram.com/0975bc48-6729-4ec2-97a8-1a1a1b2d5ee6?src=embed" title="Flexible Office Market - 3" width="1170" height="417" scrolling="no" frameborder="0" style="border:none;" allowfullscreen="allowfullscreen"></iframe> Occupier expectations for flexible office solutions vary based on their needs but usually include the ability to make short-term decisions, mitigate risks in an evolving environment, and respond to changing employee culture and habits. The flex sector&rsquo;s ability to meet these needs is why occupiers continue to choose flexible office solutions.</p> <hr /> <p><span style="font-size: 13px;"><sup>1</sup> <a rel="noopener noreferrer" href="https://www.coworkingcafe.com/blog/national-coworking-report/" target="_blank" title="learn more">https://www.coworkingcafe.com/blog/national-coworking-report/</a><br /> <sup>2</sup> <a rel="noopener noreferrer" href="https://deskmag.com/en/coworking-spaces/profitability-and-margins-2023-global-coworking-flexible-workspaces-market-survey-results" target="_blank" title="learn more">https://deskmag.com/en/coworking-spaces/profitability-and-margins-2023-global-coworking-flexible-workspaces-market-survey-results</a><br /> <sup>3</sup> <a href="https://www.cushmanwakefield.com/en/united-states/insights/experience-per-square-foot-instant-insights">Experience Per Square Foot<sup>TM</sup> Insights</a><br /> <sup></sup></span><span style="font-size: small;"><sup>4</sup> <a rel="noopener noreferrer" href="https://www.theinstantgroup.com/en-us/breakthrough-insights/research-articles/most-searched-for-amenity-round-the-clock-availability/" target="_blank" title="learn more">https://www.theinstantgroup.com/en-us/breakthrough-insights/research-articles/most-searched-for-amenity-round-the-clock-availability/</a> <br /> <sup>5</sup> <a rel="noopener noreferrer" href="https://www.gallup.com/workplace/474482/why-commute.aspx" target="_blank" title="learn more">https://www.gallup.com/workplace/474482/why-commute.aspx</a></span></p> </div> </div> </section> <div class="container"> <div class="row"> <div class="col-lg-8" style=""> <section style=""> <div class="card mix_padded "> <div class="card-body"> <div class="row no-gutters"> <div class="col"> <h5 class="card-title text-uppercase">INSIGHTS IN YOUR INBOX</h5> <div class="card-text rich-text"><p>Subscribe to get our latest research and insight from Cushman &amp; Wakefield&rsquo;s Experience per Square Foot&trade; delivered to your inbox.</p></div> <a href="https://cloud.comm.cushmanwakefield.com/experience-per-square-foot-insights" class="btn btn-primary px-5 cta-generic-btn" rel="noopener noreferrer" target="_blank" title="Subscribe" >Subscribe</a> </div> </div> </div> </div> </section> </div> <div class="col-lg-4" style=""> <section style=""> <div class="sidebar"> <div class="sidebar-body"> <h4 class="text-uppercase">Authors</h4> <hr> <ul class="list-unstyled"> <li class="mt-3"> <a class="font-weight-bold" href="/en/united-states/people/christine-wyckoff">Christine Wyckoff</a> <br>Head of Americas Flexible Office Services </li> <li class="mt-3"> <a class="font-weight-bold" href="/en/united-states/people/sandy-romero">Sandy Romero</a> <br>Head of Life Sciences &amp; Healthcare Insights, Research Manager </li> </ul> </div> </div> </section> </div> </div> </div> <section class="container" style="" > <section class="container mb-5"> <h2 class='container-headline mix_align-center'>Related Insights</h2> <div class="row"> <div class="col-lg-4"> <div class="card_noborder"> <a href="/en/united-states/insights/experience-per-square-foot-instant-insights"> <div class="insight-triangle"> <img class="card-img-top image-resizing h-auto" alt="XSF-Instant-Insight-Hero-webcard" src="https://cw-gbl-gws-prod.azureedge.net/-/media/cw/americas/united-states/insights/research-images/2023/xsf-instant-insight-hero-webcard.jpg?rev=19a16e39a2774e979bb419bc79627101" width="564" height="343"/> </div> </a> <div class="card-insight-body "> <h6 class="card-subtitle-alt font-weight-bold">Research • Workplace</h6> <p class="font-weight-bold"><a href="/en/united-states/insights/experience-per-square-foot-instant-insights">Experience per Square Foot Instant Insights</a></p> <div class="card-text"> <div class="rich-text">Our Total Workplace Research & Innovation Team provides the latest trends in the dynamic commercial real estate industry.</div> <span class="article-foot">9/25/2024</span> </div> </div> </div> </div> <div class="col-lg-4"> <div class="card_noborder"> <a href="/en/united-states/insights/office-fit-out-cost-guide"> <div class="insight-triangle"> <img class="card-img-top image-resizing h-auto" alt="office lobby" src="https://cw-gbl-gws-prod.azureedge.net/-/media/cw/global/insights/2024/office-fit-out-cost-guide/fit-out-office-americas-webcard.jpg?rev=7fd6980e744a4756904b2d1835ad0900" width="564" height="343"/> </div> </a> <div class="card-insight-body "> <h6 class="card-subtitle-alt font-weight-bold">Research • Workplace</h6> <p class="font-weight-bold"><a href="/en/united-states/insights/office-fit-out-cost-guide">Office Fit Out Cost Guide </a></p> <div class="card-text"> <div class="rich-text">Explore our Office Fit Out Cost Guide 2024 to budget and plan your workspace transformation in the U.S. effectively. Start optimizing your office today.</div> <span class="article-foot">3/21/2024</span> </div> </div> </div> </div> <div class="col-lg-4"> <div class="card_noborder"> <a href="/en/united-states/insights/the-bright-side-of-office"> <div class="insight-triangle"> <img class="card-img-top image-resizing h-auto" alt="The Bright Side of Office" src="https://cw-gbl-gws-prod.azureedge.net/-/media/cw/americas/united-states/insights/research-images/2024/bright-side_webcard.jpg?rev=b1e6e5628d424daa91b63390296df40f" width="564" height="343"/> </div> </a> <div class="card-insight-body "> <h6 class="card-subtitle-alt font-weight-bold">Research • Workplace</h6> <p class="font-weight-bold"><a href="/en/united-states/insights/the-bright-side-of-office">The Bright Side of Office</a></p> <div class="card-text"> <div class="rich-text">The Bright Side of Office examines office trends in North America and 11 gateway cities. The report covers back to office trends, flight-to-quality, demand sectors, migration patterns and more.&nbsp;</div> <span class="article-foot"><a href="/en/united-states/people/david-c-smith">David Smith</a> &bull; 1/30/2024</span> </div> </div> </div> </div> </div> </section> </section> <section class="container-fluid" style="" > <div class="hero mix_hero-prefooter js-hero"> <div class="hero-animation-container"> <div class="hero-prefooter-stripes"></div> </div> <div class="container"> <div class="row align-items-center"> <div class="col-lg-7 offset-lg-1"> <h3 class="text-uppercase">Ready to talk?</h3> <div class="rich-text">Our professionals are ready to provide further details on this and many other topics.</div> </div> <div class="col-lg-2 offset-lg-1"> <a href="/en/inquire" class="btn btn-primary" >Contact Us</a> </div> </div> </div> </div> </section> <div class="cookiecontent"> <!-- BEGIN NOINDEX --> <div id="banner_title" class="desc_text"> Your privacy matters to us </div> <div id="description_text" class="desc_text"> <p>With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.<br /> <br /> Alternatively click on More Options and select your preferences before providing or refusing consent. 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