Remote working became very popular in today’s business environment. This change was possible thanks to the level of mobility given by technology, which few imagined some 10 years back. The concept of co-working spaces became more popular along the “gig economy,” or independent contracting. This made big corporations be more interested in the the hybrid solution known as flexible workspaces. The latest annual report from The Instant Group cites the United States as the world’s leading flex space market, with a supply estimated at 80 million square feet. Having delivered “sensational growth” in 2017, this segment is forecast to continue in the same vein, which inevitably poses the question of how the trend will impact the overall office market. Now that the shock of disruption has receded, both suppliers and tenants are starting to focus on the benefits while also acknowledging that the change in working styles requires of the environment to evolve, notes Jacob Frydman, a prominent real estate expert and consultant based in New York. —
Companies are embracing flex spaces partly to meet the needs of their workers and partly to ensure their own agility in times of economic uncertainty or fluctuations in demand, Jacob Frydman explains. Frank Knight, a leading estate agency based in London (UK), has just released a report titled “(Y)our Space,” which explores factors driving occupational demand and draws on input from senior executives at 120 globally operating companies. The push for productivity has emerged as one of the five main themes in the workspace narrative, and real estate is considered a “strategic device” for businesses. However, the focus is no longer on cheap solutions but effective ones, and “the aim is now to increase productivity by strengthening the interaction between people and property via the creation of, and investment in, a positive, serviced and well-supported workplace experience.” This aligns strongly with another theme, which Frank Knight calls “space as a service.” As the report says, “The workplace is becoming a flexible business service that can actively support business growth, rather than a fixed and often (to the occupier) financially onerous physical product. This repositioning is alluring to the occupier and will become the demand default.”
The office evolution and its impact on the commercial real estate market were also addressed in an earlier report by the Urban Land Institute (ULI), which noted that the pursuit of greater productivity and the shift to smarter working were imposing new requirements on property developers. The focus on flexibility, innovation, and green design is leading to more companies seeking “curated, configured office spaces that boost productivity.” As a result, success for developers will be determined by their ability to combine design and efficiency and provide office spaces that cater to a workforce which no longer conforms to the 5-to-9 routine.
With more than 30 years of experience, Jacob Frydman is the Chairman and CEO of Frydco Capital Group and one of the leading experts in structuring, financing, and executing complex real estate transactions. He has been involved, either as an investor or adviser, in property deals valued at over $2 billion in total. The acclaimed professional shares his industry insights as a speaker and guest lecturer and is frequently invited as a commentator by major television channels such as CNBC, Bloomberg TV, and Fox News. Jacob Frydman served as a member of the Board of Directors of the Bardavon Opera House, home of the Hudson Valley Philarmonic, and supports numerous charitable organizations, among them the National Committee for Furtherance of Jewish Education (NCFJE), The Brem Foundation, and The Chabad of Duchess County.
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