Chapter 1
Occupier Sentiment
Flexible Office Space 2022
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Figure 2: Anticipated Growth of Flexible Office Space
Source: 2021 Occupier Sentiment Survey.
Nearly one-quarter of respondents report having more than 10% of their real estate portfolios in flexible office space. More than half of respondents expect to have flexible space account for more than 10% of their real estate portfolios in the next two years.
Enterprise occupiers are accounting for a larger share of revenue for some of the largest flex office providers.
- WeWork reports that nearly half of its membership is made up of enterprise customers, supporting approximately 2,300 enterprise organizations.
- IWG reports unprecedented demand, working with more than 2 million new customers, globally in 2021, including more than 80% of the Fortune 500.
- Industrious reports that enterprise desk sales in Q3 2021 increased by more than 150% vs. 2019 quarterly average.
Occupiers of all sizes are growing their flexible office space for many reasons. Demand from medium-sized and large companies (i.e., enterprise occupiers) will particularly help the flexible office market scale in the future. The evolution of companies’ flexible office space strategies ranges from “testing and learning,” which is where most occupiers find themselves today, to “strategic and scalable,” which is mostly employed by hyperscale tech companies.
Figure 3: Anticipated Growth of Flexible Office Space by Size of Company Over Next Two Years
Source: 2021 Occupier Sentiment Survey.
Small Companies
- Offer employees more choice
- Solve for uncertain demand
- Reduce capex
Medium Companies
- Offer employees more choice
- Enter new markets
- Reduce capex
Large Companies
- Reduce capex
- Test new models
- Enter new markets
CBRE’s 2021 Occupier Sentiment Survey indicates increased occupier demand for flexible office space. The need for agility has never been greater as workforce behaviors have been transformed during the pandemic and likely will never return to pre-pandemic norms. As occupiers plan real estate portfolios amid such uncertainty, flexible office space is becoming a useful solution for some requirements.
As companies of all sizes adapt to a new world of work, office space is on the brink of an evolution, similar to how e-commerce disrupted traditional retail. Companies that are early adopters of flexible space will be better positioned to embrace hybrid-working arrangements, support their employee population and remain agile in their real estate strategy.