If you’ve been hanging around real estate circles these past few years, you’ve probably come across the term Flex Space. But what does it mean, and how can it work for your business?
Well, people are no longer shying away from embracing new ways of organizing corporate spaces. They want solutions that are more efficient, cheaper, and that offer the flexibility necessary to survive in the 21st-century business world.
For years now, businesses would rent real estate spaces that are fixed for particular purposes on long term leases of about ten years. For example, a company would separately lease a warehouse and its office spaces on long term leases. This layout has been the norm for several years. However, it won’t be long before such a business runs into some challenges with this layout. These may include:
- Wasted warehouse space when demand expands and goods fly off the shelves
- Wasted office space when the staff become redundant
- The need to upgrade for more space when demand falls
- Lack of flexibility when the contract no longer works in favor of the business
What is Flex Space?
A Flex Space is a form of commercial real estate with a warehouse, office, and retail space. It is usually a sizable warehouse-style building with a built-to–spec office space and a shorter lease than a traditional office.
A Flex Space setup is becoming more attractive to investors who find short term leases more convenient than long term leases. The ability of a Flex Space to easily shift from one purpose to another also endears it to real estate clients.
What Sets Flex Space Apart From Other Real Estate Options?
Over the past few years, commercial real estate has generally fallen into two broad categories: traditional office spaces and flexible office spaces. But what separates flexible office spaces from its contemporary counterpart? These are but a few differences that make Flex Space unique and worth consideration:
1. Length of the Agreement Terms
Traditional office spaces were leased in terms of about 7-10 years, depending on the business operations. Flex Spaces, on the other hand, are leased from about seven months to three years. All of this depends on how long your commercial lease should be. Real estate experts go even further and classify all real-estate options that are leasable for less than three years as part of flexible real estate. This is regardless of whether they are traditional office spaces or flex spaces.
2. Co-working and Shared Spaces
One characteristic common with traditional office spaces is that they are leased by one company. It is uncommon to find a traditional office space or warehouse shared by two or more companies. Not with Flex Spaces. Most Flex Spaces are shared and collectively leased by multiple companies or businesses. Flex Spaces have become a staple for any business that uses the internet or co-working for its day-to-day operations.
3. The Ability to Share Amenities
The fact that Flex Spaces have shared spaces has led to shared amenities. Depending on the type of Flex Space you choose, there will be a wide range of amenities available to all tenants. These amenities may include free Wi-Fi, coffee, and lounges. The ability to share amenities does not exist in traditional office spaces.
4. Lower Startup Capital
Before a business sets up a traditional office space, there is a lot of investment required just to get the office space running. These expenses include wiring, design, furniture, office devices, and many other things necessary for running an office. Flex Spaces, on the other hand, only require an initial payment; the Flex Space offers all the design, furniture, and office devices.
5. Multi-Functional Flex Space
Unlike traditional office spaces, Flex Spaces have been designed in such a way that they can perform multiple functions. A Flex Space can serve as an office, a retail center, a research center, or a warehouse with little to no modification.
Why You Should Consider Using Flex Space
Considering a Flex Space as an option will come with various benefits for your business. Most of these arise from its flexibility as compared to traditional office spaces. Some reasons that should have you thinking about Flex Spaces are:
Embracing Flexible Spaces as a real estate option offers your business the ability to grow or contract its operation depending on the circumstances. If your company expands and requires a few more feet of office space, that is a phone call away. On the other hand, if you wind down operations in one area and require a smaller space, your Flex space has you sorted.
2. Little To No Initial Costs
The initial costs of setting up a new corporate space can be massive. Funding the furniture, the design, and amenities – added to the monthly maintenance costs, can take a toll on a business. With Flex Spaces, your firm does not have to worry about initial costs, as there are little to none. You only have to worry about rent depending on what dictates commercial rent prices in your area.
3. A Sense of Community
Compared to working from home or remote working, the shared spaces in Flex Spaces create a sense of community and teamwork. One obvious downside of remote working is that it detaches workers from their teams and firms. Flex Spaces, however, create a sense of belonging and motivation between working employees.
4. Improved Networking
Flex Spaces where various companies or workers co-exist create environments that encourage the sharing of ideas. Like-minded entrepreneurs can meet and brainstorm new ideas as other employees make friends and socialize.
5. Contract Flexibility
The brief nature of Flex Space contracts gives your business wriggle room whenever things don’t go your way. The real estate market is volatile; nobody knows how coronavirus will affect the real estate market. A ten-year contract can mean that you are stuck with that real estate agent for a long time. A three-year contract or a twelve-month contract is, however, less binding. Whenever you feel like the location is not working for your business, you can always opt-out.
5. Space Flexibility
The ability of Flexible Spaces to shapeshift into different spaces is a crucial benefit to many businesses. The fact that Flexible Spaces can serve other purposes with minimal adjustments makes them a Godsend to several firms.
The Key Take-Away
If you’re interested in Flex Spaces or more information about Real Estate options for your business, Speed Commercial Real Estate is the place for you. We have been giving answers to the real estate clients of the Jackson Metro area for years now. For more information, contact us today, and we will be more than willing to help.