Real Estate: Commercial Real Estate Landlords Partner with Flex Space

Demand is rising for flexible and spacious commercial real estate.  Consequently, landlords are paying attention to these flex spaces and investing in them.  Flexible office spaces are rising in demand mainly due to their dynamic and collaborative environments.  Landlords are now partnering with flex-space operators to provide flex spaces on their own.  According to flexible space solutions lead for Australia and New Zealand at JLL Tashi Dorjee, landlords are pairing up with flex operators with growing portfolios.  

Dorjee stated, “They have the resources to propose a financially attractive business model, guide the design and build process…plus they have the capacity to train and manage on-site staff, and fill the space to generate revenue.”  Of course, these agreements are more risky than traditional agreements.  However, they could also yield greater returns for landlords.  In fact, an economic shock like the Coronavirus pandemic makes these risky investments less risky.  This is because leasing flex space is in more demand.  

Similarly, in the hotel and hospitality industry, companies often lease properties themselves, with landlords getting a percentage of the profits.  This is because landlords are taking advantage of things like flex spaces to add value for tenants.  Flex space brands are on the rise, with newly launched brands like Dexus and SuiteX entering the market.