Report | Adaptive Spaces

The End of the Beginning North America Flexible Office Market in 2020

North America Flexible Office Market in 2020


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Flex is withstanding its greatest challenge and adapting to meet new office requirements.

Flexible office space is no longer seen as a niche sector but as a strategic solution for a broad range of companies. As this shift unfolds, certain structural changes in the way flexibility is being delivered to the market are underway. Strong players and alliances between flexible office operators and building owners are emerging, new markets are being explored and new business models are being developed to engage office users. The upheaval that has defined 2020 will lead to the evolution of the flexible office industry to a more mature state in the years to come.

Total Flexible Office Inventory (U.S. & Canada)

Note: CBRE tracks flexible office space in 49 markets (U.S. & Canada). Source: CBRE Research, Q2 2020.

Executive Summary

Positive Demand Outlook

Like the overall office market, demand for flexible office space has been challenged in the near term. The long-term outlook is positive when tenants return to the workplace, and when demand picks up, flexible office space is expected to be a key component of new requirements.

Moderating Growth

Annual supply growth of flexible office space slowed to just 7% for the year ending in Q2 2020. Rightsizing efforts are ongoing. However, in the first half of 2020, only 1% of flex space was closed from an operational standpoint.

Flexible Office Supply Growth (U.S. & Canada)

Note: Represents annualized growth. Source: CBRE Research, Q2 2020.

Acceleration of Partnerships

Landlords and flex providers are working together in a more transparent way this year to support their viability during the COVID-induced market downturn. These relationships are increasingly moving toward partnership agreements and away from traditional lease structures.

Industrious Annual Space Commitments by Type

Source: Industrious, H1 2020.

Mainstream Adoption

Occupier sentiment toward agile real estate solutions is strong, as evidenced by a recent CBRE occupier survey in which 86% of respondents see flexible office space as a key component of their future real estate strategies.

What role will flexible office play in your long-term real estate strategy?

Source: 2020 Global Occupier Sentiment Survey, CBRE Research, September 2020.

Evolving Models

Flexible office providers are evolving their business models to meet current and future demand. Interest is growing in subscription-based models that support a more distributed network of people and suite offerings to promote privacy over community.

Flex Offices: A Market in Constant Evolution

Source: CBRE Agile Practice Group, Q3 2020.

Competition from Landlords

Building owners are increasingly offering their own flexible office options in the form of owner-operated space or pre-built speculative suites, sometimes using flexible office providers to operate the space on their behalf.

Manhattan Spec Suite Footprint

*Represents 2020 through Q2. Source: CBRE Research, Q2 2020.

North America Flexible Office Markets

Click on a city to view key market stats.

Source: CBRE Research, Q2 2020.

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