Episode 10

Flex space:

Inside the changing world of space.


“At about 2015 and probably even before that, the rise of co-working within those executive suite style spaces really became a hot topic. You had the executive suites, the private offices, you had the co-working. Now, what we're seeing is the rise of these agile suites like a spec suite on steroids. So it's larger customized spaces, again, delivered turnkey fully serviced for you.”

Jillian Brown, Senior Consultant, Flexible Office Solutions at Avison Young

"it's larger customized spaces, again, delivered turnkey fully serviced for you"

In this episode

Whether you’re working from a spare bedroom, renting a desk through an app, or creating a custom space for a team of thirty, you may have been in the flex space world without even knowing it.

It’s become a familiar consideration as corporations consider selling unused office space, but grapple with the need for in person collaboration that, through it all, refuses to subside.

We explore the movers, shakers, variables, and trends which make flex space one of the most dynamic sectors shaping how and where we work.

Host Mariam Sobh discusses the latest with Avison Young’s Jillian Brown, Spacent, Ltd.’s Antti Tuomela, and Studio by Tishman Speyer’s Stephanie Manley.


  • 13:51 Jillian Brown shares the foreseeable trends in the flex space sector.
  • 19:41 Stephanie Manley talks about the industry-wide change in client needs for flex space.
  • 26:14 Antti Tuomela discusses the versatility of flex spaces for scale-up company needs.

Click here to expand transcript

Speaker 1 [00:02] So, the flex space to me is just about like, hey, this is where you can go and get on your tablet if you need to, or you can connect to WiFi or you can get a snack. It's just a kind of a gathering point, but that has amenities that are useful in this moment.

Speaker 2 [00:16] I only know it from our town. We're from Dallas. And so flex- they have flexible office spaces everywhere, where it's really designed for a temporary use to really give somebody an upstart or a place to go.

Speaker 3 [00:29] Flex space. So a space that could be used for multiple purposes would be my guess. So maybe it's a nightclub at night. And in the morning, it's a coffee shop and in the afternoon, it's a dance studio or something along those lines.

Speaker 5 [00:41] I do a lot of traveling and public speaking. And sometimes I have to jump on a computer and print some stuff. So being able to do that in a town I don't know would would definitely be helpful.

Speaker 6 [00:51] Of the flex- yeah, for me, it would appeal to be able to maybe leave the office go somewhere else, work for a few minutes or an hour or whatever, or even working from home to get out of the house to go work somewhere else.

Speaker 7 [01:07] I went to a WeWork a couple weeks ago that my company uses, and I liked the ability to see co workers, have, have a desk.

Mariam Sobh [01:20] Welcome to Changing Places, brought to you by Avison Young. In Changing Places we explore our continuing and complex relationships with the built world around us. I'm your host, Miriam Sobh. Flex space. What do you think about when you hear that phrase? Steve Jobs and Steve Wozniak working from a garage with their then-unknown computer company Apple? Or does it conjure up images of one floor in a high-rise office building being crafted into a bespoke work solution for a marketing company? You may think you've never experienced working in a flex space but the truth is, you probably already have. Your dining room table, spare bedroom, or the desk you use at WeWork are perfect examples of flex space. As we learn about this sector, we'll begin to see that the term is shifting as its uses continue to make way for the demands of corporations, employees, and our new reality. It's not just everyday employees using flex space. In June 2021, banking giant HSBC moved into a 10,300 square foot flex space at the landmark development in Manchester, England. HSBC joined Hana by Industrious at the space. NeuraFlash an artificial intelligence consultancy based in Burlington, Massachusetts, has taken up flex office space at Serendipity Labs in Ridgewood, New Jersey. Moreover, Serendipity Labs CEO John Arenas predicts that flex space will account for 30% of all office space. The future is here, and it's only getting more competitive. We're going to jump into the world of flex space, and I'm looking forward to learning more about the different aspects of it with my guests Gillian Brown, Senior Consultant Flexible Office Solutions Avison Young, and Antti Tuomela, CEO and Co-Founder of Spacent Ltd. They're going to share their thoughts and insights on what flex space is up to these days, challenges faced, and what the future looks like for this ever-evolving sector. Jillian Brown, welcome to Changing Places. Jillian, do you think most people know what flex space is if it isn't always defined?

Jillian Brown [03:23] So, in my opinion, I think that most people have their own interpretation of what they think flex space is. So, with the flexible solutions, I think kind of the broader overview is defining, you know, flexible space can be anything that's, you know, pre-built, plug and play, turnkey working environments that are offered on anywhere from a one hour timeframe to one day to two to three years is kind of that max I would say capacity for a flexible space.

Mariam Sobh [03:53] Would examples of a flex space be something like someone using a garage for their startup or a small company renting an office space as they get ready to scale up?

Jillian Brown [04:02] What we've taken a look at over the years and you've started to see kind of the integration or adaptation of these flexible operators moving from the one to two person entrepreneurs to the smaller startups all the way into the largest enterprise organizations. At about 2015 and probably even before that, the rise of co-working within those executive suite style spaces really became a hot topic. You had the executive suites, the private offices, you had the co-working. Now, what we're seeing is the rise of these agile suites like a spec suite on steroids. So it's larger customized spaces, again, delivered turnkey fully serviced for you. But that enables some of these organizations to have more of the space considerations that they need.

Mariam Sobh [04:53] Throughout this episode, we'll hear from Stephanie Manley of Studio, a flex space located at Rockefeller Center in New York City.

Stephanie Manley [05:01] As of late, we've seen our average lease term be around 14 months. But again, the minimum that we ask for is a month to month commitment. And we can get leases turned around pretty quickly. So, if someone falls in love with this space, and they want an agreement, we can get that drafted up really in the matter of a few hours and get someone set up in the space in the matter of a few days, which is a huge benefit right now for companies that are really trying to figure out what does the future look like for them. And we take care of everything. We will clean the office for you, we will arrange the desks the way that you want it, we'll put your logo on the door, we'll get your team set up on the internet and all of the studio portals. So, we really try and make it as easy as possible to let the company focus on what they do best, running their business. And we take care of all the office operations.

Mariam Sobh [05:48] Let's get back to my interview with Jillian Brown. I can imagine that COVID changed things or maybe highlighted the use of flex space. Can you help us define flex space as it relates to the last year and a half?

Jillian Brown [06:01] Yes. So I mean, you hit it spot on. It's definitely highlighted a lot of things that we're working or how people are utilizing. And on the kind of back end of that, or I would say cons, there's been some things, you know, within the flexible spaces, flexible solutions environment, that have needed to be adapted, right, and innovated and room for progress there. So collaboration, innovation. Getting out of your house if you have children or pets or significant other that you need to get a break from. These operators have started to add to the products that they already had. It's anything from a virtual address, a mailbox to these on demand platforms where you can go and you can book space for an hour, for a day, or a week for a month. And it doesn't have to be at the same space. So, we started to see the rise of technology starting to come more into these flexible office operator locations.

Mariam Sobh [06:58] Well, speaking of the market for flex space, is it a pretty big market? And are there certain cities that lead in this area?

Jillian Brown [07:04] So it is a- it's a very large market, and it's going to be growing exponentially within the next three, four years. When you look at the cities and where the growth is, New York has the the largest hub overall for the amount of total square footage and spaces that's available. That's directly followed by you have Northern California and LA, Chicago, Dallas with the most locations. When you take it to a global scale, and the overall kind of number of locations and operations, one of the interesting things that we've seen, too, is India has been growing. It's probably- not probably, it is the fastest growing market right now for the flexible spaces. London is a huge flexible office space market. Paris, Amsterdam, and then you have the APAC. China has so many locations. And you know, we take a look at that and the growth. But then, you're seeing too, as I mentioned, some of these suburban locations start to really be part of the conversation and what that looks like.

Mariam Sobh [08:11] When it comes to having a flex space- it sounds like being able to create a space for your company as needed can be freeing, but I would assume it may also be a little stressful. Are there certain considerations that go into using a flex space, whether you're a small advertising agency or a big company like LinkedIn?

Jillian Brown [08:27] There are a ton of considerations. Once the the pandemic hit and shelter in place orders and work from home were put into effect, a lot of organizations had to make very reactive decisions and implementations on how their workers were able to to work remotely. So, now that they've had a taste of it, were able to be productive, and still kind of wanting that optionality, it's, it's created a lot of questions internally for organizations that they need to answer for themselves. Over 80 percent of US companies said that their long term real estate strategy would include flexible and co-working spaces in the future. Now, we're seeing anywhere from 30, 40, up to 80 percent of organizations' real estate shifting over into the flexible office environment. So, reasons that they're doing this- kind of, I always say you got to figure out your why first. So then we can create and customize, you know, what is that right flexible solution for you. If you're entering a new market, you know, flexible space is a great option. If you need just a short term solution for your current workforce because candidly, you don't know what you're going to do in six months, one year, two years. You know, a lot of times the answer is two to three days when you're looking at the overall cost containment and strategy within that. There's not the data on that to know what this will actually look like in implementation.

Mariam Sobh [09:54] And now here's more from Stephanie Manley of Studio.

Stephanie Manley [09:58] So leases are flexible here at Studio. We ask for a minimum of a one month commitment. But we have companies that sign for 12, 24, even 36 months. We've seen recently that people are starting to be more comfortable signing longer term.

Mariam Sobh [10:15] Again, Jillian Brown of Avison Young. I think what's interesting is in some industries, like the industry that I'm familiar with, the journalism industry, one of my first jobs I had an office in the state of Illinois building to cover political stuff, even though our headquarters were somewhere else. And then things started consolidating and all of a sudden, everybody came back into the office. And a lot of other journalism companies, the same thing. They had like bureaus and people spread out, and then they all brought them back in. But now it seems like they're going back to that. Are you seeing that this is going to be a growing trend? Or do you think this is just because of the pandemic?

Jillian Brown [10:49] I certainly think it's going to be a growing trend. Over the past few years, it was really, you know, kind of 90 percent of the organizations that were utilizing flexible office space made up like 10 percent of the overall real estate. So then you have the other 10 percent of organizations that have 90 percent of the real estate. And, you know, organizations and groups like, like a WeWork, like an IWG started to tap in, you know, a few years ago of working with some of these larger enterprise organizations to figure out how could they use their space? How do they want to use their space? What can we create for them? And that is a continuing growth pattern that we're seeing. So, it's not just for the one to two person teams, the SMEs. It's for your larger enterprise organizations as well.

Mariam Sobh [11:46] Who would you say the biggest players are in flex space when it comes to providers and tenants? Are we talking about big corporations, government agencies?

Jillian Brown [11:55] Certainly, your, your biggest ones in terms of number of locations and overall square footage are IWG, which is Regis, Spaces, Signature. That's kind of all under that umbrella. You have other large operators- Industrious has been continuing to grow and evolve in their products and solutions. Merck is a really interesting one to me because it's a pharmaceuticals company and, you know, their real estate, they took to almost 70, 80 percent of all of their office real estate overall to flex. And then you have, you know, EY that just recently, within the last year, signed a big agreement with IWG. US Standard Chartered Bank, you have larger enterprise organizations that are taking 25,000 square feet, 50,000 square feet with WeWork or with Industrious or some of these larger operators. And it hasn't become so industry-specific or so size-specific for organizations.

Mariam Sobh [12:58] Again, Stephanie Manley.

Stephanie Manley [13:00] We are seeing requirements for anywhere from one desk all the way to 80 to 100 desks. They're all on some level, evaluating flex office space, and therefore evaluating studio. So, the size of the companies that we're seeing interest from really varies. Here, specifically, at 1230 Avenue of the Americas, we actually have a lot of medium size to, you know, a little bit larger sized international companies. We are seeing a lot of folks come from the UK and want to set up a US presence here. So, a handful of our larger groups do actually fall into that category.

Mariam Sobh [13:42] Well, Jillian, as we begin to wrap up, are there any specific things you're seeing in the years ahead when it comes to flex space trends? Things that are good or bad?

Jillian Brown [13:51] So I think you'll continue to see the disruption in this industry. And I think that's a good thing, the disruption and the collaboration. So you'll continue to see the interest and occupancy of some of these pre-built spaces. Again, what, what what I said was agile suite, which are larger, more customized spaces specific for users, and the utilization implementation of the on demand solutions that support those. Another thing that we're seeing a lot of is owner-operated platforms. We're seeing a lot of owners get engaged with a flexible office solutions and that can be on their own, it can be an on a white labeled solution with various different partners to support that, or it can be, you know, directly bringing in an operator on that side. The last one that I'll say is data. You know, in the past, there just hasn't been a lot of data there, as far as how are employees actually utilizing the space, how are they utilizing the flexible office spaces, what types of spaces are they using when they are coming in. And that is something that, again, is starting to become more transparent, and the ability to utilize that. So I think that will continue to evolve what we're seeing from the overall flexible market. And that is one point that I- you actually hit on that I missed is you are starting to see the rise of that where it's very user-specific or group-specific spaces. So anything from, again, recording studios to artists spaces to gender-specific to more accelerators to hacker spaces, ghost kitchens. You're starting to see a lot of these flexible spaces really cater towards a specific niche group.

Mariam Sobh [15:34] Thank you for your time, Jillian. In just a moment, I'll be joined by Antti Tuomela, CEO and Co-Founder of Spacent Ltd, an experienced real estate and business development professional from Helsinki. But first a quick reminder. You're listening to Changing Places, brought to you by Avison Young, a show that continues to explore and question our complex relationship with the built world around us. My name is Miriam Sobh. If you like what you're hearing, I encourage you to tell your friends about us or hey, maybe leave us a quick review. We'd love to hear from you. Does the thought of working closer to home in a flex space for your company sound appealing to you? No need to get dressed and commute across town. You could just walk down the block to a local coffee shop. Are you already searching the internet for a spare flex office space for your startup? Or maybe you're perfectly fine with traditional spaces? Either way, it's thrilling to know that there really are no limits to how we use workspaces or adapt them to suit our needs. Stay tuned for the next part. And just a reminder, Changing Places is a podcast brought to you by Avison Young that continues to explore and question our complex relationship with the built world around us. I'm your host, Miriam Sobh, and I hope you're liking the show so far. If so, please share us with your friends. Before we begin our interview with Antti Tuomela, let's head to Studio, a flex space located at Rockefeller Center in New York City with Stephanie Manley.

Stephanie Manley [16:57] We are at Studio 1230 Avenue of the Americas, which is one of our two Rockefeller Center locations here in New York. Studio is Tishman Speyer's Flex Office platform. We launched in 2018 by a group of very innovative real estate professionals here. And we've grown into eight major markets, 14 locations, and we're really excited about our growth. As soon as even this year, we're planning on opening some new locations. We can offer such a wide array of office space solutions to companies of all shapes and sizes. So, whether you are the freelancer that needs a single hot desk or the growing startup that needs a dedicated private space for your new team of 30 or you are a enterprise company that needs a full floor, new fully built-out HQ space, we can meet all of those needs. So, we've just passed our reception desk, which is where our on-site team is going to be sitting. And this is a great space for us to welcome any guests that come in or if visitors are coming to see us or other folks here at Studio. This is where that, you know, that single freelancer or the remote company that might not work in the city where their team is headquartered. Even members that have hot desks with us, they can actually book these rooms. We have offices as small as a one desk office, all the way through to an 81 desk office. So as we come this way and show you sort of a medium size space. This private office can seed between 16 and 20 desks. So, when you rent this space from us, you actually get all the furniture that you see here. So, the desk, the chair, the filing cabinet, all of that comes included.

Mariam Sobh [18:42] Antti Tuomela, welcome to Changing Places. Antti, I think for a long time people and especially startups have worked from home or if we think of companies like Apple, they started in a garage because commercial office rent and leases were really expensive. It sounds like flex space allows those who may have been shut out of the traditional office space leasing market, an entry point. With the world adapting to the new reality we're in, what are you seeing on the ground right now?

Antti Tuomela [19:10] Well, COVID-19, it's been a really big thing regarding flex space and the use of traditional offices, both of them. And I think that the biggest thing now is the freedom of choice. People will probably not want to go to the headquarters downtown and travel and commute and I think it's like, it gives a lot of new dynamics to the traditional offices and also flex spaces.

Stephanie Manley [19:38] COVID has certainly impacted everyone. One of the big things that we've seen change just in the industry is how people are evaluating office spaces and then how they're looking, looking to utilize their office spaces. So convenience and commutes, amenities and services, all of those things have become paramount to people. If people are going to be coming back to the office, they want it to be on their subway line, or they want it to be close to major public transportation like Grand Central or Penn Station, if they're coming from outside of Manhattan. We do see a lot of hot desk members ultimately grow into private office spaces with us. So even if they're just going from single hot desk to a small two-desk, private office, that's been really exciting to see that growth as well.

Mariam Sobh [20:29] Again, Antti Tuomela from Spacent. Who would you say are the main customers for flex space right now?

Antti Tuomela [20:35] I would say traditionally, they used to be like startups and so on, and just like starting companies. But I think it has become like a mainstream thing, especially those flex spaces that are located in different places other than city centers. And so on, cause corporations are really looking for flexibility at the moment.

Mariam Sobh [20:52] Where do you find flex spaces? I feel like now, they're pretty much could be anywhere. Anyone can just change their space and say it's a flex space. But is it usually in city centers are out in the suburbs where a lot of workers live?

Antti Tuomela [21:05] Yeah, well, historically, they've been in city centers, in business districts where people work and where the clients are at and people used to travel and so on. But of course, there's a lot of demand nowadays for suburban flexspaces. People are working from home a few days a week, and so on. So, here is a need closer to homes, which means mostly like suburbs,

Mariam Sobh [21:27] if workers are using flex space, how does it change the traditional office? Will flex space allow you to create an environment that suits the needs of your staff and company? Are you seeing any changes on that area, in terms of catering more to the employees

Antti Tuomela [21:42] Is flex based serving better people than traditional offices? there are a lot of different kinds of flex spaces, and also traditional offices. Of course, the dynamics at the moment seem to be that because of these virtual meetings, people want to go out there and have private meetings and having zooms and so on. But also they're looking for places for collaboration. It doesn't really matter if it's a flex space or traditional office. For the time being, I don't see that most of the places are serving those needs.

Mariam Sobh [22:15] We've talked with experts on the show who've said that people may only go to the office two days a week when things start to sort of get back to normal. Can a traditional office space sustain that when everyone needs a desk?

Antti Tuomela [22:26] If you look at dedicated desks and the office design at the moment, it's been challenging for a while. And obviously people are hanging out in this kind of meetings. There are surveys that 80 percent of CFOs are looking for cost savings at the moment. So these are really under radar at the moment. So, kinda like, what is the balance in the future between the dedicated rooms and desks and so on?

Mariam Sobh [22:53] When it comes to traditional office space, do you think it will have to evolve into a flex space to serve the needs of existing employees? For example, if you're in an open office floor plan, you can't have a zoom call when everyone's listening. It'll be noisy and distracting. Do you think employees are craving more privacy if offices become flex spaces? Is there a way to make it so that everyone feels comfortable?

Antti Tuomela [23:15] Yeah, of course, I think that traditional activity-based offices are now being redesigned. Again, if you're a large corporation, it's hard to kind of like pull an equation out of this one that serves everybody in a way. That obviously we know that there will be more needs for spaces for collaboration and privacy and so on. How to combine that and what to build in your headquarters, what is the role of flexspaces and home- remote working from home and so on. So there are so many things that need to be taken into account.

Mariam Sobh [23:51] Well, right now, there are companies who may have a lease on a building or office floor who may not be able to break that lease to pivot into a flex space. What have you seen in the long-term lease market? And how is that affecting the flex space sector?

Antti Tuomela [24:04] I think that what CEOs and CFOs want, they want flexibility because this pandemia has been very traumatic for most of this- especially CFOs. You have long lease agreements, and I think that in the future, they- everybody's willing to pay something additional in order to get flexibility. And I think that those property owners and landlords that offers some kind of flexibility inside the portfolio or kind of like part of the city and have a network or something those are in a way better off when it comes to compensation in the future. I don't think that real estate industry wants to change the whole logic of leasing, making long lease, long lease agreements. But the tenants, they might require and they are requiring a lot of flexibility for their employees and the financial and so on.

Mariam Sobh [24:57] How are CEOs like yourself and CFOs handling these conversations with space?

Antti Tuomela [25:03] Well, of course, those are awkward conversations with the landlord. We- it's quite impossible. If you have a long lease lease agreement, then you stay with that long lease agreement. But of course, you can provide that flexibility internally. For example, we as a company, we share our space with our corporate partners and clients. And of course, our landlord is quite happy with that. So we are just paying the lease and so on. But it's like doesn't matter to them if we share that with some someone and so what. It's not really subleasing. There will be clusters of companies that will share the spaces. And, of course, there's a lot of talk about hub and spoke model that you have your headquarters, and then you have satellite offices in different parts of the city and so on. You could do some sharing with the other corporations and so on. And of course, there is in the future, I believe that kind of like flex offering from professional operators as well.

Mariam Sobh [26:01] I do want to ask you, Antti, what if I were to start my own startup with three employees? Flex space sounds like it's the best possible option. That when I outgrow the space, I can move into a larger space. Is that how flex space works?

Antti Tuomela [26:14] Yeah. Well, of course, this scale up- pretty much, you're starting as a startup company. Then you become scale up company. I think that this flexibility, the flex offering, and the flex spaces could be an option, a really good option for all of this scale up companies in a way that you know, you don't have to move offices that often. That's a positive thing for everybody, both the tenants and the landlords. And that flex offering is very important in that sense, what the landlords are offering to the tenants, and can they offer some flexibility physically to those tenants and so on.

Mariam Sobh [26:54] You look five years down the road, are you seeing any trends evolving in the flex space, whether it's something good or bad?

Antti Tuomela [27:01] First thing, bad thing, I would say that this psychological aspect of virtual meetings, it's, it's not sustainable. People will go crazy after a long time, and there will be a lot of HR issues. So, there needs to be some kind of like a balance, and spaces are needed. Traditional headquarters and you can meet in flex spaces. Like looking at the bigger picture and positive sides of all this, I think that space sharing is a really good thing. I think that there will be a lot of solutions that support space sharing, flexibility, and so on. So there are a lot of possibilities in that sector. And I think that many companies, tenants, and the landlords will invest in this sector. And that's a positive thing. And just like thinking, the evolution of the industry. And of course, I think positive thing is also supporting people when it comes to freedom of choice. People have different situations in life and people live in different places. And that kind of like flex basis and space sharing is a nice opportunity to actually help people to balance their social life and work life and so on.

Mariam Sobh [28:15] Thank you for your time, Antti. I'd like to thank Jillian Brown and Antti Tuomela for breaking down the flex space sector. I'm ready to find my own flex space outside of my apartment. Bye, everyone- oh, wait, hold on. Join us next time as we leave the comfort of flex spaces and explore the world of data centers. They touch every part of modern life, whether you're aware of it or not. I'm Mariam Sobh, and this is Changing Places, brought to you by Avison Young. Thanks for listening. See places changing and evolving in your neighborhood? Share your evolving spaces with us on social media using the hashtag #changingplacespodcast. I'm Mariam Sobh, and this is Changing Places. Changing Places is brought to you by Avison Young. Our producer is Andrew Pemberton-Fowler. Our sound engineer is Patrick Emile. Our production assistant is Gabriella Mrozowski. Additional production support is provided by JAR Audio.

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