In a post-pandemic workplace, the market for flexible office space is on the rise. A new study by The Instant Group found that demand for flex spaces in the United States is now 58% higher than before the COVID-19 pandemic. Even as the return to the office occurs, companies are increasingly shifting toward newer working models that allow employees to incorporate flexible workspaces into their day-to-day professional routines.
So what’s driving this growing demand and what does it mean for the future of the flex space industry?
Business relocation is driving demand
Many companies and workers are seizing the opportunity to relocate as hybrid and remote work become the norm. No longer tied to traditional corporate hubs — like the costly downtowns of California, New York, and Chicago — people and businesses are migrating to areas with lower tax rates and costs of living.
While flex growth is uneven across cities, new business hubs like Houston and Phoenix are growing amid these nationwide trends. The Instant Group predicts that the prices of flex space memberships will jump in these areas, where supply is bound to lag for some time.
However, businesses are still able to cut costs while relocating or pursuing new markets by taking advantage of flexible workspaces, making them an attractive alternative to traditional corporate offices.
To make relocation, hybrid work, or fully remote work successful, companies will increasingly focus on employees and show appreciation for their efforts. Flex market leaders may find success when offering amenities and perks that help teams connect, like access to multiple flex space locations or video conferencing rooms.
Flex workspaces are a much-needed solution
Flexible workspaces are becoming central to many companies’ changing work strategies. The Instant Group reports that 60% of businesses making changes are looking toward flex spaces as a means to facilitate it.
This is largely due to growing employee demand for remote and hybrid work, whether it’s due to a desire for light commutes, concerns about COVID-19, or something similar. Offering access to flex spaces actually widens talent pools by lowering geographic barriers while ensuring that employees can achieve a happy work-life balance.
Many businesses have already found that hybrid work leads to the best productivity levels. This is especially the case when businesses put in place bring-your-own-device (BYOD) policies, which further improve productivity and employee satisfaction. Flex spaces perfectly facilitate growingly virtual hiring practices and device policies.
Flex supply will diversify
Since many businesses are still in the experimental phase of selecting and incorporating flex workspaces, flex supply will need to diversify to meet the ever-changing needs of businesses and remote workers.
Flex spaces will take on different niches by offering different wellness programs, sustainability initiatives, events, networking opportunities, and more.
Already, The Instant Group reports that the majority (66%) of new supply growth within the flex market is being led by workspaces outside of the top four operators, which include Industrious. This means smaller flex space providers in growing flex markets have a strong chance to scale. Getting creative with membership perks can help flex space leaders offer more value to their target audiences and rise above their competition.
The state of the flex market is changing
While there are a lot of uncertainties in the flex market since businesses are still in the early stages of developing new work strategies, one thing is for sure: demand for flex spaces is rising on the whole. Hybrid work is more popular than ever since it facilitates enhanced productivity, lower costs, and higher profits.
The value and price of flexible workspaces will increase amid these trends, since supply is expected to lag — at least, outside of traditional business hubs like San Francisco and New York, where flex markets are still struggling to rebound.
However, flex spaces continue to be highly attractive and affordable alternatives to owned office spaces, especially when they offer niche amenities that cater to their members.