How IWG Flexible Workspaces Allow Landlords to Diversify and Increase Profits

International Workplace Group (IWG), a flexible workspace solution that has been operating for over three decades, including 1,200 operating locations within North America with more than 200 already added in development this year, brings a multitude of investment modes and opportunities to the flexible workspace sector. One of the primary modes of strategic partnership with IWG features landlords and building owners who choose to adopt the IWG model rather than entering into or renewing traditional capital leases.

“We’ve essentially built out an organization within the organization to focus exclusively on partnerships,” explained Wayne Berger, CEO of IWG The Americas. “We’re conducting outreach with building owners as an opportunity for them to diversify their portfolios and generate immediate operating income.”

Landlords with commercial office space traditionally rely on long-term capital leases to maintain their businesses. These leases can run for 10 years or longer. But with remote and hybrid work on the rise and the culture of work rapidly evolving, many employers are downsizing or eliminating their brick-and-mortar office space altogether. To fill current or upcoming vacancies, many landlords are struggling to identify tenants willing to commit to long-term leases.

Meanwhile, rather than simply working from home, more and more employees are expressing a desire for flexible workspace solutions in their local communities. With this evolution in work culture, the global flexible workspace industry is projected to nearly double in size, from $7.97 billion to $13.03 billion, by 2025. 

This presents a unique opportunity for commercial landlords to cater to shorter-term tenants at higher profit margins by partnering with IWG. From sleek top-floor office suites to renovated warehouse spaces to converted retail space in shopping malls, the flexibility of IWG workspaces makes it a viable option for nearly any commercial landlord.

The Landlord + IWG Partnership Process

Once they partner with IWG, a landlord invests the capital necessary to convert a current space to an IWG branded space. Currently, the IWG portfolio offers four flexible workspace concepts under its umbrella to match every kind of business, work style and price point, including professional workplace brand Regus, creative workplace brand Spaces, and hassle-free workplace brand HQ. Once this is complete, IWG sells and operates the location. 

“We drive revenue by offering the vacant floor or building as a flexible workspace location,” Berger explained. “We staff the team, we deploy all of our resources and technologies, and we place it onto the world’s largest global network that drives over one million inquiries every single year.” 

He added that the biggest difference between a standard capital lease client and an IWG client is the flexibility it affords the tenant. While most clients do renew their Regus rental agreements, they have both the option to move at the end of a shorter-term lease rather than waiting a decade or more, as well as the flexibility to move to another IWG space without the burden of building out a new office. 

“They want the ability to port that contract to a new location,” said Berger. “They want the ability to select space for a month, a day, a year or three years.”

By providing this much-desired flexibility for tenants, landlords can reap a larger profit than they would from a standard long-term lease. 

IWG is currently seeking landlord partners in key markets across North America as it aims to add 1,000 locations per year on its way to 10,000 total units. The company is targeting landlords that own either a single building or a small portfolio of buildings, have an entrepreneurial spirit and perhaps most of all, share IWG’s belief that remote work is here to stay and understand that flexibility truly is the future.

Commercial landlords can learn more about partnering with IWG here. Property agents and brokers can review more information here.