The race is on for landlords, building owners and property developers to sink or swim in this dash to flex-space. As flex becomes the new demand default for office space, tenants are calling the shots. With nothing but options in a fast-growth market, it boils down to “may the best operator win”. Below is a snap-shot guide to flex-space for commercial real estate players.
asset to service focused
Reconsider core aspects of your business and service operating model to focus on delivering agility, flexibility and amenities that drive value, productivity and superior tenant experiences.
Moving to a service model allows you to align more closely to tenant expectations and requirements. Being able to meet growing demands will justify a higher price for space as well as long-term value of your assets.
As a CRE stakeholder, you have the advantage of property and amenities at your fingertips, which makes both testing the waters and scaling up more accessible. However, you must decide which flex-space business models can best facilitate entry into the market.
Some options include buying or owning, traditional leases, non-traditional leases or management agreements. Your decision will ultimately come down to the amount of risk and liability you’re willing to take on.
brand and culture
With a greater focus on tenant expectation and the broader market shift from product to service, brand is a top priority. Your brand and culture directly impact member experience, occupancy rates and your bottom line. Having a clearly defined brand, culture, values, and vision is critical for success.
A booming market with growing demand requires you to clearly define what you are and who you’re targeting in order to create a differentiated value proposition. This is possible via community, technology, culture, and a clearly differentiated member experience.
A coworking space is more than putting a bunch of desks in a room. It’s a messy, high-maintenance operation that involves dealing with people and their varying needs. It sounds simple but in reality, it’s quite complex. The most important element in this operation is the ability to manage “the humans”, and if you miss that piece, you won’t succeed in this market.
Your staff and operational processes are key to ensuring a smooth and always-on member experience. Don’t underestimate the power of technology to simplify complexity and ensure your workspace is meeting tenant expectations.
design and architecture
Avoid hiring your go-to architect for your flex-space venture. They may specialize in office spaces, but it’s unlikely they have experience designing shared office spaces. The difference is that flexible workspaces must be revenue generators in order to be successful. The space must be conducive to community building and must not obstruct the essential technology infrastructure. Be practical about your layout, furniture, and design look and feel. Remember that every square foot can generate revenue, so optimization is crucial.
With flexible offices, the space provider is responsible for delivering technology services that meet the requirements of varying tenant needs while also ensuring business continuity. A one-size-fits-all approach won’t work in a flexible office environment. To fill the gap, consider a tech proposition that can overcome the operational complexities of delivering secure and reliable services across multiple systems, tenants, and locations.
It is crucial to leverage technology that lends control and visibility over the operation in a way that helps you to make more informed business decisions. Tech today is also critical in engaging with tenants and creating compelling propositions that ensure excellent member experiences.