The coronavirus pandemic has brought upon great uncertainty for the flexible office market as operators have been forced to postpone expansions or scale back their current footprint.
According to a CBRE Real Estate Report, stay-at-home orders in certain states will likely have a negative impact on certain industries, such as the retail, food & beverage and transportation sectors.
The analysis also found that the few flexible offices that have remained open throughout all of this are experiencing very little to no use as many people opt to work from home. This has led several operators to look into renegotiating rent with landlords in order to stay afloat.
Flexible office commitments reached one million square feet in Q1 2020 and remained stagnant for the second consecutive quarter.
Commitments were down by 32.1% year-over-year for the four quarters ending Q1 2020, with WeWork accounting for no commitments for the first time since its founding.
WeWork’s implosion caused a massive plummet in Q4 2019, and providers were poised to pick up the slack at the beginning of 2020, but those plans never materialized due to the coronavirus.
The report found that Hana accounted for 18.2% of new flexible office commitments, followed by Serendipity Labs at 11.8% and Knotel at 11.3%.