Embracing Flexibility: Leading Landlords Guide to Thriving in the Era of Managed Office Spaces


In the fast-paced world of commercial real estate, 'flex' real estate is not just a buzzword; it's a game changer. It's like yoga for buildings - flexible, adaptable, and surprisingly good for your health (financial health, that is). This concept signifies spaces that bend and stretch to meet the ever-changing needs of modern businesses. It's about lease flexibility, space agility, and offering a smorgasbord of amenities. Crucially, this shift reflects where the underlying demand from tenants is moving, as they increasingly seek 'plug and play' workspaces that can adapt to their evolving requirements. The insights in this article are gleaned from our extensive collaboration with leading landlord partners across Europe’s largest cities, capturing guiding principles on how to succeed in this tenant-driven transformation.

Impact on Landlords and Investors

Decoding the Shift to Flexible Workspaces

The shift towards flexible workspaces, also known as 'real estate flex,' resembles a chameleon, constantly adapting to the changing colours of business needs. Managed offices are at the heart of this transformation. They're like the Swiss Army knife of office spaces - equipped with everything a business could need, from sleek furniture to high-speed Wi-Fi. These spaces are not just about a roof and four walls; they're a 'plug and play' solution that makes moving in as easy as making a cup of coffee.

The Appeal to Landlords

Managed offices are increasingly attractive to landlords for their ability to scale costs and services to tenant needs, significantly reducing the risk of uncovered fixed costs compared to fluctuating co-working spaces. This model offers a more predictable revenue stream, with the added advantage of being able to charge a premium, thus enhancing net income. Managed offices also tend to have lower vacancy downtime, as their ready-to-use, fully-serviced nature appeals to tenants seeking convenience and flexibility. This results in financial stability for landlords and potential for increased profitability.

Transforming Traditional Spaces

Forward-thinking landlords are leveraging the trend towards flexible workspaces by transforming conventional office areas into dynamic, managed environments. This strategic shift to offering a mix of private offices, co-working areas, and communal spaces aligns with the diverse requirements of modern tenants, leading to increased occupancy rates, tenant satisfaction, and ultimately, enhanced property values.

The Bottom Line

The rise of managed office spaces is a curveball that landlords can catch and throw back with interest. By understanding this trend and adapting to it, landlords can not only safeguard against market shifts but also tap into the burgeoning demand for flexible, service-rich work environments.

Practical Advice for Landlords

Adopt a Tenant-Centric Approach

In today's dynamic real estate market, a landlord's adaptability is key. Understanding and responding to the evolving needs of modern tenants is crucial. A strategic move is to rent office furniture from NORNORM and use their subscription service. This choice allows for swift and easy customisation of spaces to align with diverse tenant preferences. More importantly, it addresses the perennial challenge of furniture inventory management. With this approach, you can effortlessly update or change the setup to suit new tenants, reducing downtime and ensuring your spaces are always ready and appealing. This not only satisfies specific tenant requirements but also simplifies the often cumbersome process of transitioning spaces between different occupants.

Invest in Technology

In the digital age, a building without smart technology is like a car without power steering – harder to manage and less enjoyable to use. Incorporate tools like OfficeRnD, which streamline everything from room bookings to billing. It's about making your building not just a space, but a smart space.

Focus on Community Building

Building community in a flexible workspace is like cultivating a garden – it requires care but blooms wonderfully. Take inspiration from places like Epicenter in Stockholm, known for hosting keynotes and learning sessions for its startup community, or Sustainable Ventures in London, which organises climate tech events. These initiatives transform buildings into buzzing hives of collaboration and innovation. This not only enhances the appeal of your property but also supports the growth and success of your tenants.

Embrace Sustainability

Sustainability in building management is like a good diet – it's not just a phase, but a lifestyle. A lifestyle that more and more tenants are looking for. Implement green initiatives such as energy-efficient lighting, water-saving fixtures, or recycling programs. Consider the example of The Edge in Amsterdam, heralded as one of the greenest buildings in the world, using LED lighting and allowing employees to control their environment via a smartphone app.

Diversify Your Portfolio

Achieve a balance between traditional leases and flexible spaces. This strategy ensures stability in your revenue streams while capitalising on the burgeoning demand for flex spaces. It’s about not putting all your eggs in one basket but diversifying to cater to a wider market.

Balancing Flexibility and Stability

Long-Term Strategy

While the market is leaning towards flexibility, it's important to maintain a strategic long-term vision. Your goal should be to create a property portfolio that aligns with your long-term investment objectives while being responsive to the evolving needs of tenants. This balance is crucial for sustainable growth and success in the real estate market.

Risk Management

Mitigate risks by diversifying your tenant base and lease durations. This strategy helps to cushion against economic fluctuations and keeps your portfolio resilient in a changing market.

The evolution towards flexible workspaces is more than a trend in commercial real estate; it's a critical shift for success. Landlords who adapt with innovation, community focus, and sustainability aren't just keeping pace; they're setting the pace, ready to capitalise on future opportunities. By embracing this new reality, they position their properties as premier destinations in a competitive market.