Even after more than two decades in the market, flexible office space continues to be undervalued by appraisers and financial institutions — a gap that industry leaders say is stunting the sector’s growth, according to BisNow.
While the income from well-run flex spaces is increasingly stable and resilient, that financial performance isn’t being fully reflected in how properties are valued. Occupancy rates remain high, tenant retention is strong, and operators are seeing long-term demand. But despite this, the financial upside of flex space often goes unrecognized.
Flex Space Delivers Strong Income But Lags in Perception
Buildings with significant flex space components are often generating strong, reliable income. However, without a robust body of comparable data, lenders and investors remain cautious. This disconnect between performance and perception has made some landlords hesitant to dedicate larger portions of their buildings to flexible workspace, even though occupier demand keeps rising.
Many investors view allocating more than 20% of a building’s space to flex as a tipping point that could negatively affect valuation — a limit that industry insiders argue is increasingly out of step with market reality.
Industry Leaders Form New Coalition to Bridge the Data Gap
To address the lack of transparency and data, a group of operators and landlords has launched the Workplace Intelligence Network, a coalition focused on anonymously pooling occupancy, pricing, and churn metrics. The goal is to create a shared dataset that can be used to better inform valuers, investors, and lenders.
With a stronger foundation of sector-wide data, the group hopes to change how flex space is assessed — demonstrating that managed, short-term workspaces are no longer a niche product, but a core component of modern real estate strategy.
Investors and Occupiers Align on the Value of Flex
As corporate occupiers become more comfortable with the idea of bundled occupational costs — combining rent, services, and amenities — flex is increasingly seen as a strategic solution rather than just a stopgap.
Some operators are leaning into this by expanding managed space solutions that provide streamlined agreements between landlords, tenants, and service providers.
Industry voices say the future of flex lies in new investment structures that reflect its real value — including models that roll up operational income into stable, long-term returns. That approach could attract fresh capital into the sector and incentivize landlords to scale up their flex offerings.
