The year 2022 marked an incredible milestone in commercial real property, with an amazing office occupancy rate of 50.8 million square. ft. according to reports from industry experts. This isn't just an increase over those of the previous five years (2015-2019) by 3.1%, but it also stands as the second-highest absorption rate in the past decade in the last decade, just behind 2019 figures. This surge in offices, driven by the return to work across many industries, not only bolsters net absorption but also paints a picture of market stability and a positive future.
The Rise of Flex Spaces: A Paradigm Shift in Workspaces
To meet the changing needs of business needs and portfolio strategy, there's an obvious demand for flexible, agile and modern workplaces. This shift toward flexibility in operational processes has helped propel these spaces to the forefront as a popular choice for users. The past 12 months have seen a significant shift in companies to flex workspaces, prompted by the necessity to diversify portfolios and adapt to the evolving needs that employees' needs have changed.
Harsh Binani, co-founder of Smartworks the world's largest corporate-focused workspace platform, expressed huge confidence in Commercial real estate market's growth trajectory. Binani highlighted the rapid expansion of flexible spaces within the commercial realm, highlighting the rapid growth of flex spaces. Binani predicted a strong phase of growth and anticipates significant growth and consolidation among the major operators in the flex industry over the next five years.
Benefits Harsh Binani Fueling the Flex Market Growth
The wide acceptance of flex spaces across different sectors demonstrates their many benefits. The main drivers behind the rise of flex workspaces include real property cost optimization in addition to scalability, flexible rental tenures and strategies for attracting talent, full-service managed services, and attractive amenities in modern workplaces. Binani also emphasized this concept by saying that "Flex is the new way of working," by citing good leasing trends among large and small enterprises, which are currently around 80% in their total portfolio.
Growth Trajectory and Market Predictions
The market for flexible space, rising out of turmoil in markets is now seeing an explosion in growth. Industry experts forecast that this trend will Harsh Binani continue on its upward trend, predicting a double-digit growth in 2023. The hybrid office culture is likely to remain the preferred choice for occupiers throughout 2023, solidifying that market share for flex spaces. It is predicted that flex space' market penetration will ascend to 4.2 percent by 2023. There are also industry-wide projections of double the footprint in the in the next two to three year.
The Future Outlook
As demand grows for more flexible and well-equipped work environments, the flexible space segment is poised for substantial growth. The transformative shift in workplaces and portfolio strategies will continue to drive the increase in demand for flexible fluid, and modern workspaces across all industries and business.