Companies and CEOs that fail to recognise the benefits of investing in flexspace risk being left behind, says Jamal Brown, founder of San Diego commercial real estate firm The Ocean Company.
To say the last couple of years have been interesting times for the commercial real estate industry would be an understatement. The pandemic has catalysed a growing trend for flexible working, with an increasing number of companies responding to employee demand by embracing a hybrid model that allows people to split their time between the office, home and a local coworking space.
As Founder and Principal of The Ocean Company, a San Diego-based firm that specialises in tenant representation, Jamal Brown has been at the frontline of this revolution.
“Workers value their freedom”
Brown firmly believes that flexible workspaces will be an integral part of the new world of work, and brokers will play an important role in helping clients navigate it.
“There are a lot of people who left the office at the beginning of the pandemic and don’t really want to return,” he says. “That’s especially true of younger workers who now value more freedom in their work environment. They don’t want to commute 45 minutes each way on a busy freeway every day of the week.
“They want the flexibility of being able to get their work done somewhere close to where they live, which means they don’t have to commute into a centralised office five days a week.
“Employers are therefore becoming more heavily dependent on large national or international flexspace operators, because you can have one centralised office, but also many smaller satellite offices in the heart of communities where your workforce can go to do their work, potentially even meet as a team and be happier.”
Brown, who swapped a career in insurance for commercial property management in 2001, has noticed a rise in flexible workspaces entering the market in San Diego. Of course, they have had a presence in the Southern Californian city for a while, but up until a couple of years ago they were more traditional in style and what they offered customers.
Now, he says, clients have many more interesting, exciting options that offer collaborative spaces with business lounges and breakout meeting areas. They are also increasingly opening in San Diego’s ‘neighbourhoods’ outside of the commercial Downtown centre – such as North Park and East Village – which reflects the 15-Minute City trend that has been growing around the world.
“Figure out what’s going to make your employee base happy”
Of course, it’s not just employees who benefit. By offering staff membership to a flexspace operator with multiple centres in the city, there’s no need to invest in a central office with an expensive long lease, reducing real estate spend and increasing the company’s profitability.
“Flexspace can benefit businesses of any size in any sector,” Brown explains. “All you need to do is pick up memberships or choose a couple of different offices around the city or country where your employees are based. Or, better still, use a global operator like IWG where memberships grant access to thousands of workspaces worldwide.”
He says that CEOs who ignore trends such as hybrid working and fail to recognise the benefits of investing in flexspace risk being left behind.
“I believe that going forward, companies that recognise we can still get all our work done by adopting the hybrid model are going to outperform ones that don’t.
“A lot of founders want to think of their company as their baby. But when it comes down to your employees and what they’re doing for the company, that’s paramount. So it’s really more important to figure out what’s going to make your employee base happy and productive, and think about what’s going to help you retain the people that are really making this company profitable.”
“Companies will favour a hub-and-spoke model”
Brokers, Brown adds, play an important role in helping businesses identify their workspace needs, but to do that he encourages clients to first start conversations with employees about their requirements.
“A lot of times, larger companies don’t have a discussion with their employees or fail to do an employee survey,” he says. “But it’s important to find out who wants to come back to the office and who is more comfortable with doing a hybrid flex model, either at their central office or with other flexible office options around town.
“As brokers, we need to promote that to our clients so that they understand how much space they really need as they go forward.”
After all, hybrid working and flexspace are here to stay.
“I don’t think that we’re going to go back to a time where every single person is coming into a centralised office, especially for larger companies,” adds Brown. “As long as work is getting done, as long as companies continue to be profitable, they’re going to look at the real estate spend of having, for example, two floors in a building to house all their employees as a wasted expense.
“Instead they will continue to favour a hub-and spoke-model that consolidates a relatively decent-sized central office, combined with the use of flexible workspaces or smaller satellite offices in areas where employees live.”
IWG has been helping brokers design sustainable corporate flexspace solutions for the last 30 years and can support you with every type of hybrid work solution.
