The flex office space will never be the same. Here's how companies like Convene and Industrious are getting creative to win over remote workers.
Flexible office providers are adapting their businesses to meet the different demands of their clients as offices across the country begin to reopen. Serendipity Labs has launched a subscription service that is targeted at big companies that are looking for individual private office space close to employees' homes. Convene is launching a digital conference tool that will facilitate both all-digital and hybrid digital and in-person conferences as the virus has led to cancellations of large events. The pandemic has also spurred flex office players to create an industry council to share best practices. Visit Business Insider's homepage for more stories.
Coronavirus, and the massive remote work expansion that followed it, has massively destabilized the office. While it is unclear what the long-term effects will be, companies are reimagining how their real estate footprint responds to the challenges of social distancing in a pre-vaccine world, and what that will look like in the longer term. For flex office providers, this could be a major opportunity to snap up customers who don't want to sign long-term leases while the world is so uncertain. The pandemic has put the flex office industry at an inflection point. The coronavirus pandemic rocked the sector as the startups and entrepreneurs that it counted on as clients have decided to either stop using their workspaces or just stopped paying rent. Big players like Convene and Industrious announced layoffs in March and April as America worked from home, and even as the hardest-hit cities reopen, the rise of remote work risks continues to be an existential threat to the business. Now, flex office providers are becoming even more flexible in an attempt to align more closely with their customers' needs during this period of immense uncertainty. "For now, companies are listening to their employees and everyone wants something different – so rather than a future that favors either office or remote-centered work, I believe flexibility will be the real long-term shift we see," Michelle Killoran, a real estate investor at OMERS Ventures, told Business Insider. Serendipity Labs, a nationwide flex office provider that has a majority of its spaces in suburban and smaller cities, like Kansas City and Nashville, has launched a subscription service aimed at employers who want to supplement their staffs' home office with another flexible workspace. Convene, which offers flexible offices as well as meeting and event spaces has quietly launched digital conferencing tools and workplace consulting services to serve a wider range of clients. Companies are also looking to highlight how they can provide an even safer workplace experience during the pre-vaccine period, with enterprise-focused flex provider Industrious helping to launch an industry group focused on cleanliness and hygiene. Subscriptions and suburban office space The buzziest terms in the office world are "distributed work" and the "hub and spoke" model, ideas that look to find a middle ground between one central office and the fully-remote workspaces. By providing a variety of working locations, firms hope to see higher employee satisfaction and more resiliency during crises like the pandemic. The strategy gives workers options to work closer to their home, whether in the outskirts of a city itself or in the suburbs. While large coworking spaces in an urban center may come to mind when discussing the flex industry, many companies already operate flex centers outside of the central business district. Office Evolution, a flex provider that focuses on suburban markets and smaller cities has seen an increase in demand for private office space, according to CEO Mark Hemmeter. Hemmeter said that most demand so far has come from small businesses and freelance workers, but that he expects larger corporations to start renting more space as employees push their employers to offer a workplace somewhere between the downtown office and the employees' home. Read more: The coronavirus is a 'nuclear bomb' for companies like WeWork. 10 real-estate insiders lay out the future of flex-office, and how employers are preparing now. "Where we're going to see is the driver of the individual versus the employer that is going to really change the landscape of real estate strategy in the future," Charlie Morris, the leader of Avison Young's US Flexible Office Solutions, told Business Insider. Serendipity Labs operates both suburban and urban locations. CEO John Arenas told Business Insider that inquiries for suburban locations are up to 90% of pre-COVID levels, while urban locations are only at 40% of pre-COVID levels. He said that 35% of demand is coming from companies reevaluating their office space after the pandemic. The company has launched a temporary subscription program that allows companies to provide individual workspace for employees close to where they live. The plan is fungible between employees and locations and has a rolling start date. Unlike coworking companies, the space is a private, enclosed office but offers coworking-like flexibility on use and location. The company also offers by-day desk rentals to support those who only occasionally need to leave the house for work. "We knew that large company clients, it makes less economic sense for them to be in a traditional lease for a secondary market and suburb, but they also have to react to and support a more mobile and remote workforce," Arenas told Business Insider about the origins of the plan. Breather, a flex office and meeting space company, has always had just-in-time and subscription booking models. CEO Bryan Murphy told Business Insider that this model has attracted a lot of interest. "The number of leads, phone calls coming in looking for flexible has doubled in the last thirty days," Murphy said. "There are no traditional leases being done right now." Flexible business models and a flexible industry Others in the industry are exploring digital means of keeping clients. Convene, which provides office space but largely focuses on events and meetings, has launched a digital conference tool. The tool, which CEO Ryan Simonetti described to Business Insider as "the digital twin to Convene's onsite experience," will facilitate both entirely online conferences and "hybrid" events, that combine a smaller in-person meeting with a digital stream of the events. Convene employees will stand in as consultants who can help to prepare and test the technology before the meeting and provide support for any tech hiccups along the way. The company will also offer comprehensive post-event data that analyzes the attendees. Convene CEO Ryan Simonetti said that the company's funnel of confirmed events at the last half of the year makes it seem like "we're going back to normal in September," but that larger events are also still being affected. The digital conferencing tool allows for conferences to have smaller in-person events for local attendees while also reaching a larger, farther away audience. Read more: WeWork is bringing corporate staff back to New York offices in 3 waves as the city enters the next stage of reopening. Here are the details the coworking giant just gave workers. Flex companies also starting to interact with each other for the first time to create industry standards, which they hope will make clients more comfortable about returning to their spaces. Industrious has led the formation of a Workplace Operator Readiness Council, which is sharing best practices for cleanliness and preventing disease transmission across 25 international operators, such as IWG, CBRE's Hana, Convene, and Serendipity Labs. Industrious CEO Jamie Hodari told Business Insider that the council was created because flex companies, who tout their ability to create the best places to work, need to actually share best practices in order to deliver a quality, and safe experience to their customers. "We need to be in the 98th and 99th percentile of American businesses in how we approach the return to work," Hodari said. In the spirit of flexibility, Hodari hopes that the council will eventually evolve beyond sharing best practices for hygiene, to operating as an industry-wide council that promotes standards across companies. Read more:
Leaked Knotel financials reveal that the WeWork rival had huge pre-pandemic losses and now has more unpaid bills than cash. It's a grim sign for the flex-office space. Death of the office talk is 'ludicrous,' says Brookfield CEO Bruce Flatt. Here's where the real estate giant is seeing big opportunities. Leaked WeWork document reveals a huge reorg under way for people who manage its buildings. Here's how the new structure works — and the complex process for staff to save their jobs. SEE ALSO: WeWork is bringing corporate staff back to New York offices in 3 waves as the city enters the next stage of reopening. Here are the details the coworking giant just gave workers. SEE ALSO: The coronavirus is a 'nuclear bomb' for companies like WeWork. 10 real-estate insiders lay out the future of flex-office, and how employers are preparing now. Join the conversation about this story » NOW WATCH: Here's what it's like to travel during the coronavirus outbreak
More like this (3)
Flex-workspace firm Breather has hired bankers to explore options including a sale, and it's a sign of a bigger consolidation push as office demand tanks
Summary List Placement Breather, a flexible-workspace firm that carved out a niche renting small spaces for...Summary List Placement Breather, a flexible-workspace firm that carved out a niche renting small spaces for short windows of time, has hired Moelis & Company and is exploring options including a potential capital raise or sale, according to two sources with direct knowledge of the matter. A spokeswoman for Breather and a spokeswoman for Moelis, an investment bank and advisory firm that specializes in...
Internal documents show how Microsoft's flexible work-from-home plan will actually work, including getting approval from a manager to work remotely over 50% of the time or relocate (MSFT)
Summary List Placement Microsoft earlier this month said it would introduce a new flexible work policy...Summary List Placement Microsoft earlier this month said it would introduce a new flexible work policy that opens the door to a more permanent remote work situation for some employees, even after the company reopens physical offices. Internal documents reviewed by Business Insider spell out exactly how the policy works. "Leading in a flexible work environment is a skill and a capability and we...
This is how COVID-19 will change offices forever, according to Pi Labs, a VC that invests in real estate tech firms
Summary List Placement The COVID-19 pandemic has hammered the commercial real estate sector, and forced companies...Summary List Placement The COVID-19 pandemic has hammered the commercial real estate sector, and forced companies to think about how they can use technology to improve both employees' productivity and their wellbeing. A 2019 PwC survey found that nearly 90% of property investors believe that technology innovations in real estate will continue growing over the next five years — COVID-19 appears to have accelerated...