‘Healthy Runway’ for Flexible Office Space
All signs indicate the office market can handle significantly more flexible space than it currently has, said JLL, Chicago.
A JLL report, Flexing Their Muscles: Markets to Watch in 2019, predicted 30 percent of the U.S. office market will be flexible space by 2030 compared to less than 5 percent today.
“Flexible work is not just a passing trend, it’s woven into the fabric of the future of work,” said JLL Senior Vice President and Director of U.S. Office Research Scott Homa. “Even though some markets are better positioned for rapid growth, this still leaves significant runway for expansion across all U.S. office markets.”
Homa said JLL expects continued disruption of the traditional office leasing model “as investors, occupiers and operators come to terms with a new, more flexible way of business.”
Flexible space inventory, which includes co-working space, incubators and other short-term space options, has grown at a 23 percent annual rate since 2010, the report said. Last year flexible space accounted for nearly two-thirds of the country’s office market occupancy gains.
The report predicted every U.S. region will see more flexible offices, but noted some markets will grow faster than others. Top markets poised to see more flexible space going forward include Los Angeles (Westside), Seattle, Washington, D.C., Austin, Texas, California’s Silicon Valley, San Francisco and New York.
“There is no one-size-fits-all flexible approach, just like there’s no one type of worker,” said JLL Corporate Solutions Americas President Doug Sharp. “Flexible space options allow workers and teams to select the right space to perform work each day in a location that will help realize their company’s mission and their own ambitions. This is one of the reasons we see so much runway for flex space in U.S. office markets; it addresses several core needs for employers and employees alike.”
JLL studied 25 economic, demographic and other variables in U.S. cities for the report, which includes demand projections based on current space requirements among corporate tenants and local market forecasts.
