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Why IWG Can Be a Valuable Partner for Landlords Today

As more and more organizations look for shorter-term leases, the worldwide flexible workspace leader has added hundreds of new locations via strategic partnerships with landlords and building owners to its partner network in 2022.

It is no secret that hybrid working is on the rise. Following the pandemic, employees are increasingly opting to spend a few days at home and a few days in an office. As a result, the flexible workspace industry is exploding in popularity. International Workplace Group (IWG), the largest provider of flexible workspaces worldwide, is at the forefront of this trend, helping landlords, building owners, and institutional developers adapt to the changing post-COVID world by eliminating income losses on empty spaces. 

"As more organizations end their long-term office leases, building owners face a hard choice," said Wayne Berger, CEO of IWG of The Americas. "They must either alter their income strategy or significantly invest to change their building's asset class, an option often not feasible. There's a considerable amount of space, particularly in B or C class buildings and markets, that will sit vacant, waiting for tenants that won't arrive. This is where we, at IWG, can step in to provide a solution for these landlords."

Instead of signing a conventional lease, IWG offers building owners and both institutional and individual investors a second option — fully absentee space management, a program in which IWG activates and manages all of the operations on behalf of the landlord, giving them the ability to generate revenue and operating income with no operational work.

"Across the globe, IWG serves as a solution for countless building owners," said Berger. "Creating an IWG flexible workspace immediately generates operating income for landlords, eliminating the need to chase long-term leases. Instead of a traditional lease, we form a partnership agreement with the owner, activate the location, link it to our extensive network, and establish and manage the IT infrastructure using our top-tier team."

IWG sits down with every prospective investor and lays out a financial model to showcase when they will recoup their investment, drive income and bring in a premium over market rent. From there, IWG will help building owners understand an indicative floor plan.

"With over 33 years of experience as a global leader, IWG has refined the art of crafting the ideal operations and hospitality business through past successes and failures,” said Berger. “Though it may seem straightforward, the process is complex and sophisticated. It's crucial to design the space for revenue optimization from multiple sources while ensuring an outstanding experience for everyone from the moment they step in."

IWG also has a team for design, construction, sales, marketing, and everything needed to build, operate and launch a successful new flexible workspace. “Our goal is to work together with building owners to find the right model for them and demonstrate how and why flexible working is going to be a driving force in their portfolio,” said Berger.

The IWG portfolio of brands, with more than 3,300 locations in 1,100 cities worldwide, includes Regus, its professional workplace brand; Spaces, its creative workplace brand; HQ, its hassle-free workplace brand; and its luxurious workspace brand, Signature. IWG is currently aggressively targeting North America for expansion, looking to add 1,000 locations each year to its more than 1,200 locations in the U.S. and Canada and eventually surpass 10,000 locations. Much of its expansion is through its landlord investor and property developer model.

"The concept of centralized work is fading,” said Berger. “Landlords who cling to conventional office lease models are at risk. IWG offers a solution, filling vacant spaces with immediate income that grows over time as the flexible workspace matures. By incorporating an IWG flexible workspace in a building, landlords add a critical amenity to a sector set to expand from 4% to over 30% of total commercial office space in the next eight years."

For the landlords, building owners, and institutional developers willing to evolve, Berger says they have an exciting opportunity to not only meet the growing demand for flexible workspaces and drive operating income but also to help move the world in the right direction.

"The workforce craves flexibility while still desiring an office culture,” said Berger. “Although this might seem like a tall order, it isn't. Every new flexible workspace we open fosters opportunities for collective engagement. Employers can minimize commuting or provide an alternative to working from home by utilizing these spaces. Flexible work benefits people, boosts profits and is good for the planet. By partnering with IWG, landlords have an unprecedented opportunity to help usher in this new era and change the global workforce for the better."

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