What Changed in the Workspace for Landlords in 2022

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 growing rapidly as business investors, building owners and institutional developers look to fill empty spaces and cater to a growing demand for hybrid work.

Even prior to the COVID-19 pandemic, a hefty percentage — around 50% — of the workforce was working remotely at least one day a week, said IWG CEO of the Americas Wayne Berger. But over the past few years, that trend has accelerated rapidly. Today, 90% of workers in North America are working in a more flexible way and 88% of companies are supporting those workers.

Perhaps one of the most lasting trends is the adoption of flexible workspaces. Instead of working out of a centralized office a couple of days a week and from a home office a couple of days a week, workers are opting for a third option where they work in a flexible workspace closer to home. This allows them to get all of the social benefits of an office, without having to go back to the days of unnecessary commutes.

With this shift, companies are being forced to take a second look at their commercial real estate portfolio and evaluate how to move forward. This, in turn, is resulting in many employers downsizing or eliminating their brick-and-mortar office space altogether.

“We anticipate that 30% to 40% of real estate portfolios will be flexible by 2030, and 17% of that will be flexible by 2024,” said Berger. “This means vacancy rates — which are at 65% in the U.S. in traditional downtown financial districts — are increasing rapidly around the world. Space that is under lease, signed prior to the pandemic, is being underutilized or left completely empty. Companies need to reexamine their leases and consider flexible workspace as a core amenity for their portfolio. We are giving them a solution that drives revenue as it matures and can very well exceed the income derived from traditional leases over time.”

For landlords struggling to identify tenants willing to commit to long-term leases to fill current or upcoming vacant spaces, partnering with IWG allows them to appeal to the growing demand for flexible workspaces and shorter leases.

Last year, as this seismic shift in commercial real estate continued to pick up steam, IWG, for example, saw a 500 new partners join the company to take advantage of this opportunity in markets around the world.

“Suddenly, there is a real dramatic shift in how companies are looking at where they deploy their workforce and what working looks like every day, and in turn, savvy investors are finding ways to meet that demand and drive long-term returns,” said Berger. “Building owners can take a percentage of their portfolio, partner with IWG, invest capital to convert that space to a flexible workspace and start earning income from day one.”

Learn more by watching the full webinar between 1851 Franchise Publisher Nick Powills, IWG Regional Director of Partnership Growth Ryan Semler and IWG CEO of the Americas Wayne Berger.

For partnership opportunities, visit: https://www.iwgplc.com/en-gb/develop-a-location.