Around a year after the pandemic cut leasing volume by 92%, flexible workspaces are preparing to rebound.
According to a new report from JLL, the industry saw a steady rise in growth between 2014 and 2019. However, the characteristics that these spaces were once loved for became their Achilles’ heel during the pandemic.
Still, there are indications that the sector is emerging from the hole that was 2020. For instance, WeWork recently announced it would be going public via a special purpose acquisition company (SPAC), allowing it to fund its growth plans.
In addition to this, companies are strategizing their post-pandemic models that largely include hybrid arrangements, allowing workers to work from home and in the office. This means that the need for flex space will likely grow.
“This is more meaningful than a shifting of deckchairs,” said Ben Munn, managing director of flex space at JLL in the report. “Companies and investors are taking a different view on flex space entirely and are willing to invest because they see this as a bigger proportion of the overall office market than it is currently.”
Munn anticipates that the flex market will return to growth in the second half of this year, with flex space operators making their own business model changes, such as management agreements, in order to become more sustainable.