Flexible office providers are seeing occupancy rise
December 06, 2022
- Jacob Rowden
Stabilized flexible office product average occupancy levels
- While office re-entry has remained fairly flat since Labor Day, flexible office providers have seen their occupancy rates improve steadily since late 2020 and early 2021, and are approaching pre-pandemic levels in recent quarters.
- Public filings of WeWork and IWG, the two largest flexible office providers who collectively operate more than half of the flex market in the U.S., show that occupancy rates within their portfolios have recovered to more than 90% of 2019 levels in recent quarters.
- While occupancy is rising, the flexible office industry continues to rebalance portfolios and shed underperforming locations; after averaging more than 4.0 m.s.f. of leasing per quarter in 2019, the U.S. has yet to exceed 1.0 m.s.f. of flexible office leasing in a quarter since 2020 Q1.
- Given prolonged uncertainty in corporate workplace strategy, many segments of the tenant base are likely to gravitate to flexible-term leases. Outpaced recovery of occupancy in the flexible office segment illustrates occupiers’ preference for agile, pre-built spaces.