Hand selected flexible workspace news from the most reliable sources to keep you ahead of the pack. We find all the latest news, so you don’t have to. Morning and afternoon updates. Stay in the know.
- How An Algorithm Could Help People Work From Offices Safely
- Coworking Giant Ucommune Receives $53M Backstop Investment Through Orisun Acquisition
- A Surge In Management Agreements Stands To Benefit Coworking Operators
- Companies Need To Develop A Long-Term Remote Work Strategy
- Younger Workers Face More Challenges Working From Home
- Flexibility In CRE Is Key As Companies Move Forward
How An Algorithm Could Help People Work From Offices Safely
Many people are still working from home, and are expected to continue doing so for some time. There will be a gradual return to the office for many companies, but due to physical distancing, not everyone can return at the same time — and for the same amount of time — as they did prior to the pandemic.
So how do you calculate the right blend of in-office and at-home working?
An algorithm could provide the solution, according to SquareFoot’s president, Michael Colacino, by assigning the right amount of space at the right time: “It’s something that we have to allocate, the same way that you would allocate water in the desert.”
SquareFoot will reopen its offices in September, and workers will be able to bid for the amount of time they want in the office. The algorithm will help determine how much they get. In addition to a reduction in staff numbers, Colacino also sees a move toward lower-density satellite workplaces that are close to transport hubs.
Coworking Giant Ucommune Receives $53M Backstop Investment Through Orisun Acquisition
Nasdaq-listed Orisun Acquisition and Ucommune — China’s biggest shared workspace provider — have received $53 million in backstop investment commitments from 14 investors.
Orisun agreed to acquire Ucommune in June this year, and the merger is expected to complete in the fourth quarter.
Orisun chairman, Wei Chen, said: “With the $53 million backstop investment commitment, we look forward to working with the Ucommune team towards a smooth closing [of the merger] in the fourth quarter of 2020.”
Ucommune, which has a network of 185 coworking locations across China and Singapore, officially withdrew its plans for a $100 million IPO in the US. Following the merger later this year, Ucommune will instead be listed on the Nasdaq through the M&A agreement with Orisun.
A Surge In Management Agreements Stands To Benefit Coworking Operators
For some years now, landlords have been introducing flexible space in a variety of ways — often, by leasing space to a flexible office operator. This satiated growing demand for flexible space and, in some cases, allowed the landlord to provide other workspace solutions to tenants that outgrew their coworking space.
However, COVID-19 has impacted the coworking sector heavily and many operators are facing difficult decisions.
With landlords eager to retain a flexible workspace element in their portfolio, some are now looking at management agreements as an alternative route that works in favor of both parties.
By partnering with experienced flexible space operators rather than simply leasing out space, landlords are able to receive a greater share of the revenue and have more control over the flexible offering, while the day-to-day running is left to the coworking company. For the coworking operator, a management agreement helps protect them from economic shocks and ensure smoother revenue generation. Also, the landlord typically takes on the cost of fitting out the space.
One example is London-based Knotel, which has management agreements in place for around one quarter of its portfolio.
“Larger flex operators with a growing portfolio are the ones entertaining these types of agreements,” says Tashi Dorjee, flexible space solutions lead – Australia and New Zealand, JLL. “They have the resources to propose a financially attractive business model, guide the design and build process, the capacity to train and manage on-site staff, and fill the space to generate revenue.”
“The simplicity of flex leases help save tenants money, while the hospitality aspect helps attract talent,” Dorjee says. “For property owners, they see the opportunity to tailor flexible space to their building, as well as shape the experience for the tenant they want to attract.”
Companies Need To Develop A Long-Term Remote Work Strategy
A recent survey found that less than a third of leaders have a long-term remote work strategy. This needs to change, especially as more companies begin to look at remote work as a potential permanent arrangement for some employees.
According to the survey, smaller firms are less likely than larger companies to be planning for the future, even though half of them expect the percentage of their employees permanently working from home to increase in the near future.
Key considerations that leaders and companies need to take into account in their long-term remote work strategy include: employee productivity, company benefits, loneliness and mental health of employees, burnout, technology support, corporate culture, and communication and collaboration.
Younger Workers Face More Challenges Working From Home
A recent survey found that Gen Z and Millennials reported challenges in working from home, driving their desire to return to the office.
The findings came as a surprise, as many believed that baby boomers would be the ones to struggle the most with remote working as they are less familiar with the technologies used to telework.
Some of the reasons why younger workers may be facing more challenges include the fact that they are less likely to have a dedicated workspace within their homes; more distractions (most younger workers live with family or roommates); and less experience with working from home.
As for wanting to go back to the office, work-life balance plays a big role for younger workers. But also, and potentially more importantly, is the fact that they could be missing out on networking and mentoring opportunities.
Despite these findings, many companies have recently announced that their employees will continue to work remotely, at least for the time being.
Flexibility In CRE Is Key As Companies Move Forward
COVID-19 has had a dramatic impact on the way people use and engage with built environments. In the office sector, many believe there will be a reduction in a company’s CRE footprint as more organizations allow for permanent work from home policies.
Yet, this does not mean deals aren’t happening. In fact, JLL reported that there have been some sizable transactions over the past few months. The key difference now vs before the pandemic is that flexibility has become a top priority for organizations of all sizes.
Large, mid-size, and small businesses are reportedly searching for flexible space. As a result, landlords have responded by being more willing to offer rent-free periods and more flexible terms.
While no one knows how long the uncertainty and impact created by COVID-19 will last, one thing is for sure: flexibility will be key in the commercial real estate market as companies begin to navigate the new normal.