Daily Digest News – February 26, 2021

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.

Here’s what you need to know today:

The State Of D.C.’s Coworking Market

The coworking industry was the fastest-growing sector in Washington D.C.’s office market just two years ago.

However, the pandemic has halted this growth and forced operators to give back hundreds of thousands square feet of space.

“Coworking was really the only sector that was new and was driving positive growth for the city up until this year,” said Michael Hartnett, JLL Senior Research Director. “None of these sectors that are D.C.’s homegrown sectors are in growth mode outside of a bit of tech.”

WeWork closed three of its oldest locations in October and announced four additional closures last month.

Additionally, D.C.-based coworking firm MakeOffices shut down last month, but is aiming to find another operator to take over its nine locations across the market.

According to CBRE, occupancy of flexible offices fell by 879,000 square feet in the six months ending on January 31. This was around an 18% decrease of their previous footprint.

The pandemic has poked gaping holes in the typical coworking business model of taking out long-term leases, then subleasing out on a short-term basis.

Along with WeWork’s closures, IWG filed for bankruptcy for numerous entities across the country last year, including at least two D.C. locations. This move was intended to offer some wiggle room while the company restructured its leases.

This tumultuous time for the industry has forced operators to rethink their strategies, with some looking towards adopting management agreements with landlords and offering “spoke” workspaces in secondary and suburban cities.

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Countries Offering Remote Working Programs

Working while traveling has become much more accessible in the past year, and many countries are taking advantage of this to boost tourism.

Countries have launched visa programs that allow workers to come live and work. However, many require employment outside of the destination, proof of sufficient funds to sustain a long stay, medical insurance and negative COVID-19 tests. 

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For instance, while tourists cannot travel to Montserrat at the moment, the Caribbean island’s Remote Workers Stamp allows remote workers to stay for up to 12 months.

“The response to this initiative has been extremely positive,” said Warren Solomon, Montserrat’s director of tourism. “The geographic spread of the applicants matches our main international source markets, namely the U.S., Canada, U.K. and Europe.”

Those who apply will know within a week whether they are approved to stay on the island. Upon arrival, they must test negative for COVID-19 and quarantine for 14 days.

The Bahamas have also launched a new 12-month residency permit titled the Bahamas Extended Access Travel Stay (BEATS) program.

With this program, remote workers and students can move across 16 different islands in the Bahamas. Workers will need to show proof of employment, while students will have to provide proof of school enrollment and sufficient funds to cover their living and traveling expenses.

Similar to most countries with this type of program, travelers will also need a negative COVID-19 test to apply for a Bahamas Travel Health Visa, an additional requirement.

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Companies Are Not Adjusting To The Future Of Work

Research from occupancy and analytics provider Locatee has found that many companies are not yet adjusting their corporate workspaces to accommodate the new future of work trends.

The responses from real estate managers in the U.S. revealed that many companies are holding on to antiquated real estate strategies.

For instance, 62% of CRE managers said they plan on continuing to use assigned workspaces, compared to the 4% who stated they would use activity-based spaces.

Although now is one of the greatest opportunities for companies to reconfigure their work environments, many companies are insistent upon sticking with their normal operations.

Additionally, two-fifths of those surveyed stated that the influence CRE managers will have on company operations will continue post-pandemic. Still, only 46% of CRE managers said they have final budgetary sign-off.

“This lack of budgetary control, despite elevated strategic influence, means CREMs face a significant barrier when implementing ground-breaking action around real estate strategies,” the report stated. “This focus on business efficiency, both in the short and long term, is at the expense of emerging initiatives such as collaboration, employee satisfaction, digitization and talent attraction and retention.”

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