The workplace is undergoing a transformation on many levels. The rise of the shared workspace – we will refer to it as the flexible office in this blog – is clearly not a fad. A year ago, many in CRE declared the jury to still be out on companies like WeWork. That can clearly no longer be the case. The underlying drivers for the flexible office phenomenon are not merely about space requirements for startups and small companies. Fortune 1000 companies require flexible space for much shorter terms than have typically been commonplace. A recent report from CBRE, in fact, stated that the lifespan of these very companies has declined to below 15 years – in such a scenario, it is difficult to imagine a large company committing to a 10 year lease. Companies like Amazon, IBM, and others have embraced flexible office and are moving more of their employees into spaces managed by third parties on relatively short terms.
There are a number of reports circulating about the size of the flexible office market. On the one hand, it has been reported that the Fortune 1000 cohort today allocates 10% of its budget to flex space. This number is reported to be growing to 20%. Another report, the same quoted above from CBRE, states that perhaps 30% of commercial space in the United States will be under flexible office style agreements by 2030. With 90B square feet here, that would translate to over 25B flexible square feet. Given today’s total market is likely less than 30M square feet, that represents exponential growth over the next decade. Technology will play a critical role in the flexible office. Tenants expect to move in, turn on, and start developing products or services. They rely more heavily on public cloud to create these products. They also expect that their network offers robust security and data protection, ensuring that the intellectual property (and value) they create is secure. These are the table stakes of any flexible office, and today it is mostly an afterthought. Tenants expect something more robust than what they could alternatively find at Starbucks. Join™ provides the secure, high performance platform for the digital workplace.