How IWG Is Building Out Space Differently Now Versus Pre-Pandemic

Flexible working has emerged as one of the primary, lasting impacts of the pandemic, and that has meant that the real estate industry has had to adapt. International Workplace Group (IWG), the 3,300-location flexible workspace global powerhouse parent of Regus, a professional workplace brand; Spaces, a creative workplace brand; HQ, a hassle-free workplace brand; and Signature, a luxurious workspace brand, is a prime example. The company, which expanded its footprint with a whopping 500 partners last year alone, has continued to find ways to better align with what employees, employers and business investors are looking for in the post-pandemic landscape. 

“We are shifting to a smaller office portfolio footprint, for example, because we’ve seen a high demand from smaller teams and individuals who need a flexible workspace,” said IWG CEO of the Americas Wayne Berger. 

These smaller footprints also appeal to business investors and building owners, as it allows them to dip their toes in the water and convert a portion of their commercial real estate portfolio into flexible workspace, as opposed to diving in all the way. 

“Business investors only need to convert some of the space under their portfolio,” said Berger. “This will simply provide them with a new stream of potential tenants they can’t access today. It is also a new stream of income. We’ve been able to successfully launch an IWG location in a space as small as 10,000 square feet.”

IWG has also continued to invest in technology, which is a key strategy for several reasons. Not only do the hybrid workers of today desire the latest advancements in technology, but many of them also need it to do their jobs properly. Very few remote companies are providing the necessary tools workers need to WFH comfortably full-time and meet the company’s I.T. security protocols, which is why flexible workspaces like IWG have become so important. 

“Only a fraction of people even have the capability to work out of a home office,” said Berger. “People need that separation between work and home. Getting people out of their homes is not challenging — it's getting them to commute an hour that is no longer possible.”

Similarly, Berger says one of the primary shifts IWG has seen is where in the country people want to work. IWG used to primarily grow in downtowns and then moved to the suburbs. Now, they are seeing a huge acceleration of demand in small towns of 10,000 to 15,000 people because workers want to stay close to home. They want to live, work and play, all within a 5-to-15-minute commute.  

“As companies become more geographically diverse, we’ve also seen more and more candidates ask us for access to locations across 20 to 30 cities,” Berger said. “That is why we’ve been dramatically accelerating opening locations in smaller markets and transport hubs, like Champagne, Illinois or Duncan, Texas. We are really shifting to a new economic approach in which people want to live, work and access services close by. That means smaller towns are a perfect place for coworking. Instead of traveling to the closest large city to work everyday, people from these towns have access to work closer to home.” 

Beyond building great spaces, Berger says IWG has also implemented new ways to ensure all workers in their spaces are receiving the highest quality-of-life experience possible. 

“For example, health and wellness is now the number one benefit people are thinking about when joining or staying with a company — superseding pay, bonus and title,” said Berger. “It can’t be ignored. That is why IWG provides employees and employers with all the benefits they need for a fulfilling experience, whether it be fitness or gym memberships, access to programs and events, etc.” 

By aligning with the needs of today’s employees and employers, IWG has stayed ahead of a seismic shift in the industry. Now, business and institutional investors have the opportunity to do the same by converting some of their commercial real estate portfolio into a flexible workspace under the IWG portfolio. This provides business investors with operating income from day one, a higher return on net assets and increased flexibility, similar to how Airbnb has distributed residential real estate, Berger says.

“When the pandemic first hit, the first questions building owners had were: How do we make sure air systems are clean? How do we make sure everyone is safe? That is still a critical requirement, but the conversation has shifted,” Berger said. “Many people thought we were going to go back to the way we worked pre-pandemic. But that isn’t true. People don’t want to waste time and money aimlessly commuting to an office, regardless of what they have to accomplish. People really value their time, both at work and outside of work. No one wants to go back. This complete shift, as an investor, is something to pay attention to.”

In a recent webinar, 1851 Franchise Publisher Nick Powills, IWG Regional Director of Partnership Growth Ryan Semler and IWG CEO of the Americas Wayne Berger discussed how IWG has seen record-breaking agreements with business investors to turn empty building space into profitable revenue. Watch the full conversation here. 

Learn more at https://www.iwgplc.com/en-gb/develop-a-location.