New York defines the flex space revolution
Making headlines across the real estate industry and providing others a place to work, it’s no secret that flex space is on the rise. And it’s showing no sign of slowing down soon- particularly in New York. Since 2010, the total amount of office flex space that is available in the market has grown at an 23% annually. Not surprisingly, the market that is leading the charge in flex space options is New York City, with 16.1 million square feet currently available- the largest volume of any market in the country. New York’s entrepreneurial economy, influx of flex space-oriented real estate solution firms making New York their home, and the abundance of large owners, make New York the optimal location for the flex space revolution.
Small businesses and freelance workers make up a large portion of flex space users in the United States, and New York City has a high concentration of these types of workers due to the diversity of companies with a foothold in the market. These workers are looking for office space, but don’t need large volumes of traditional space or the commitment long-term leases. Flex space is optimal for this section of the work force because it allows them to be adaptable and find the right space and layout to preform work each day, without the need for a long-term lease. Flex space fits what these small businesses and individuals are looking for because it allows them to be adaptable, and change what they are capable of, depending on what needs to be done that day. It certainly helps that New York has the largest variety of options when it comes to flex space.
New York is home to many firms that specialize in sharable and flexible workspace. Companies such as WeWork and Convene have made New York their stomping grounds, showing that they recognize New York is a hot bed for their product. WeWork is a firm that provides shared workspaces for startup companies and freelancers, as well as temporary space for larger firms looking to avoid overflow. Convene is an option that offers premium places to work, meet and host events- allowing firms to design their office space without conference and board rooms while utilizing shared resources for those needs.
Sharable work space firms are not the only ones who have made taken to New York. The city is also home to some of the world’s largest landlords. These landlords have recognized the revolution taking place in their own backyard and are working with tenants to roll out more owner-operated flexible space models. Bigger firms are looking for more permanent work addresses than can be offered through sharable workspace, but still want to maintain the flexibility of work space that these firms can offer to cost-effectively accommodate unforeseen headcount changes and maintain their agility Larger landlords are responding by offering mid-size flex space, also known as customized headquarters. With 20.5 million square-feet of office space under construction, and a large selection of creative and historic properties to appeal to potential tenant, New York has the supply to match the demand when it comes to flex space.
New York may be leading the charge in the flex space movement, but it is certainly not the only market that is experiencing the revolution. Cities such as San Francisco, Silicon Valley and Austin, home to some of the world’s largest tech firms, have been experienced a push towards flex space as well. With these factors considered, it is possible that leasing activity in Manhattan could be completely dominated by flexible space providers in 2019- a tell-tale statistic that the revolution is not just a trend. Flex space is here to stay.