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Chelsea Story, Senior Associate, CBRE. Image courtesy of CBRE
While more and more companies are announcing dates and strategies for their return to the office, the profound impact on the workplace the global health crisis has had is still unraveling. With growing divides between executive and worker preferences when it comes to hybrid work, flex office solutions like coworking have proven to be a good match for the evolving needs of companies.
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In its latest report, CBRE explored the recent evolution of the flex office space sector across 49 North American markets. CBRE Senior Associate Chelsea Story talked to Commercial Property Executive about the rise of office flex space in the Dallas-Fort Worth region and how it managed to rank second, after only Manhattan.
How has the office flex space industry changed since the onset of the pandemic?
Story: The health crisis accelerated trends that were already happening in terms of flex office space. Companies still value having office space for their employees, but now offering flexibility in terms of hybrid work or a flex office closer to home is an important tool for them when it comes to recruiting. The amenities offered by flex office providers are more important than ever as well as tenants are really looking for these spaces to offer a sense of community.
Dallas-Fort Worth placed second in terms of flex office space. What factors helped the region gain popularity?
Story: DFW is continuing to emerge as a tech hub, which has been a huge factor in flex office space leasing. With start-ups in particular, we’re seeing new, high-growth companies looking for their first offices and choosing to go with flex space as a way to really get a sense of what they are looking for without the long-term commitment.
The Metroplex is also unique in that there are so many different suburbs where people can have the “live, work, play” experience. Companies aren’t limited to certain submarkets in order to attract top talent. Flex office space plays a part in this because it allows companies to access a number of talent pools in different areas.
Which submarkets are the most in-demand for flex space?
Story: Far North Dallas, specifically West Plano and the Quorum/Bent Tree portion of the submarket are most in-demand.
What are tenants looking at when selecting flex space in the Metroplex?
Story: Amenities and convenient locations. With any type of office space now, it’s all about what the space can offer people that they can’t get at home. Employers are looking for a space that gives their employees perks like on-site cafeterias, coffee shops, high-tech conference rooms and nice employee lounge areas.
Having a convenient location is big, too. No one misses traffic while they’re working from home, so companies are looking to minimize that for their employees. Another aspect to that is walkability to nearby restaurants and retail. It’s a big draw when people can easily leave to go get lunch or grab happy hour after work.
What would you say is most distinctive about the Dallas-Fort Worth flex office sector?
Story: I think that the sheer size of the market is the biggest differentiator between DFW and other markets. Flex providers are across the entire Metroplex instead of just the traditional business areas.
Overall, the office industry in the metro is incredibly diverse as well, so there isn’t one main industry that fuels the job market or labor pool demographics. We have tech, energy, finance, business services, real estate—we really have everything. This trickles down into the flex office sector because it means there is a diverse group of companies who are looking for flex space.
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How do you think the push for the return to the office will impact the industry?
Story: Any push to get people back in the office is good for the flex office industry. Flex space gives companies and employees more options, which has been the key in getting people back to the office.
There is still a lot of unknown about how the workplace will be utilized moving forward and companies have to figure out a return-to-work strategy that best aligns with their culture. Flex office space gives them the ability to be strategic and take the time to evaluate what works best for their employees.
How do you see the industry evolving in 2022 and beyond?
Story: Just as we’re seeing in traditional office users, flight to quality will play a major role in flex providers’ ability to attract and retain the best tenants. Companies will continue to incorporate flex into their overall real estate strategy, so they’re relying on their flex partners to play an important role in their ability to recruit and retain top talent.
The bar has been raised for a lot of people to be enticed to go back into an office, so it’s exciting to think about how flex office providers will continue to come up with creative new offerings.
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