Flexible workspace can improve office building performance and tenant appeal, but only up to a certain point, according to a new report from JLL.
The consultancy found that flex workspace tends to support office assets most effectively when it makes up no more than roughly 17% of a building’s rentable area. Beyond that level, lenders and investors may begin viewing the property as riskier because more of its income depends on shorter-term, variable workspace revenue instead of traditional long-term leases.
Flex Space Is Becoming A Standard Office Amenity
Coworking and flexible office space have become more embedded in mainstream office strategy rather than existing as a separate alternative to conventional leasing.
Landlords are increasingly using flex space to help fill vacancies, attract tenants, and offer shorter-term workspace options inside larger office assets. In many buildings, coworking operators now function more like hospitality-style amenities designed to improve the tenant experience and support leasing activity, according to Coworking Europe.
Investors Still Prefer Lease Stability
While investor attitudes toward flexible workspace have improved in recent years, the report says concerns still emerge when too much of a building relies on flex income streams.
Traditional office leases are typically viewed as more predictable and easier to underwrite. Buildings with a heavier concentration of coworking or serviced office space may face more scrutiny from lenders and buyers because revenue can fluctuate more significantly over time.
That dynamic can complicate financing, valuation, and resale discussions, particularly in uncertain office markets.
At the same time, JLL said investor confidence in the flex sector is gradually improving as operators mature and management agreement structures become more common.
