Companies of all sizes are thinking about how to bring their employees back to the office. The buzz around hybrid and distributed working models has brought a renewed focus on flexible office and, in particular, how to deliver it. We put together a market-leading panel to get the latest perspectives on how the move to flex is turnings gears across the industry.
Moderator: Liz Elam, Executive Director, GCUC Global
Christine Wyckoff, Director of Enterprise Sales and Partnerships, Cushman & Wakefield
Mike Caracciolo, Senior Director, Tishman Speyer
Jeremy Bernard, CEO North America, essensys
Changing Working Models
These continue to be unprecedented times. For some companies, the path back to the office is clear. Others are only now talking about how to restructure their real estate strategies. There’s no cookie-cutter approach to the new normal just yet. But Jeremy Bernard stressed that the office still has a significant role to play in it. “Occupiers want culture, collaboration, and cooler talk. The office will be part of the overall Tetris of how people consume office, but it won’t be five days a week.”
Hub-and-spoke models, in which employees can toggle between an HQ office in a central area and spoke locations in transport hubs and suburbs, are not new but are more compelling post-Covid. To reduce occupancy across a single office location means splitting employees between HQs, home and local flexible workspaces. Christine added that the flex industry needs CFOs and CEOs to approve membership costs to help bring occupiers back into offices in these hybrid models.
The Demand Side of Flex
The days of static, traditional office space are over. A primary selling point for flexible office models is the ability to meet occupiers’ changing needs over time. Liz Elam asked the panelists what type of demand they see in the market. At Studio, which offers a full suite of flexible products, Mike highlighted the increasing need for private, turnkey, and fully serviced short-term flexible space for single tenant-use. Studio Private, which caters to this demand, is considered an amenity to a company’s broader real estate play.
This approach to flexibility solves a wide range of needs. It gets compelling for larger companies to move to flex when they can couple fully serviced flexible space with coworking and hot-desking options across multiple markets.
Jeremy noted the increased demand for frictionless experiences. People want the ease of booking and accessing space and moving from one workspace to another, especially as hybrid model adoption rises. They want to open their laptop at home, HQ or a flex-space without multiple logins or having to worry about security, privacy or data issues so they can get to work and stay productive.
Let’s Talk About Flex
Landlords are working to understand how flexible office fits into their portfolio. Christine Wyckoff highlighted that landlords are taking a more proactive interest in exploring flexible workspace – from how it will impact overall portfolio performance to cost-analysis and valuation. “Previously a tough sell, flex is now part of landlords’ strategic plans,” Christine said. “They want to know what they can bring to the table.”
Jeremy Bernard added that conversations with landlords used to be about if or when they offer flexible solutions; they’re now about how and how fast they can deliver them. “Tenant demands for flexibility as we come out of Covid are driving this new line of thought among landlords. If they don’t adapt, they run the risk of losing new and existing tenants to the competitor across the street”.
Mike Caracciolo, director at premium flex-space brand Studio by Tishman Speyer, offered calming words: “The office is not dead.” Now is the time for landlords to consider how they’ll deliver flexibility across their buildings. “Everyone is looking at adjusting their real estate stack, consolidating and being more efficient. Flex is part of that conversation right up front.”
Tech to Support New Working Models
In a post-Covid world, being in a workspace needs to be worth the commute and offer more than the home office environment. To bring people back to the office, providers need to entice their occupiers with simple and compelling in-building experiences. The panelists shared a common sentiment among occupiers: zero patience for technical and operational obstacles.
Technology expectations have increased. Mike pointed out that people are tired of being their own technical support center at home. Office providers must step up to the challenge and ensure they have the right technology and digital infrastructure in place to meet a wide range of tech specifications.
But it’s not as simple as it seems. A flexible office operation is inherently dynamic and complex. It has to meet a wide range of constantly changing space and service needs – from shorter and flexible leases to shared services and resources – across multi-tenanted environments, multiple locations and buildings.
The level of complexity becomes exponential with scale added to the mix. Technology is critical to support the management layers required. But building technology in-house or outsourcing it to a third party falls short of solving common operational challenges. Security is an essential component of the digital infrastructure for flexible office models, especially for enterprise companies. Overlooking the importance of either security or scale can pose serious risks to the operation’s overall success.
Mike explained, “Scaling, managing growth and keeping our product at a premium level is challenging from multiple aspects. Studio decided it wasn’t practical to scale our technology on our own”. He recommends aligning your operation to trusted partners. Jeremy added, “build it yourself and off-the-shelf technology are risky. Some landlords start to build the tech stack themselves and they approach essensys when they realize it’s too complicated”.
It’s critical to make the right technology decisions from day one to ensure the proposition can meet the occupiers’ technical specifications today and in the long term.
Paving the Way for Better Workspaces
While there are many considerations for landlords and flex operators, one thing is clear: they can’t stand still. Flexible workspace has historically removed barriers to seamless workspace environments. The bar is higher now, and it’s time for all workspace providers to remove any friction points between occupiers and their demands for greater flexibility and better in-building experiences.
I've been writing content about flexible office and technology since 2015 for essensys. My focus is to bring engaging and insightful perspectives to the flexible workspace sector of the commercial real estate industry.
Technology has been pivotal in enabling space providers to meet the growing demand for flexible office space. James Shannon was invited to contribute his technology expertise to Savills’ UK Flexible Office Report – this article sums up his perspectives.
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