As COVID-19 restrictions continue to ease across the country, commercial property owners are starting to wonder what type of office rental properties business owners will be demanding in the coming months. Prior to the pandemic, co-working environments were all the rage. While this momentum may continue, others are looking at a hybrid/flex space approach that combines traditional office suite locations with flexible terms and built-in, shared tech amenities. Let’s look at common technologies found in flex spaces along with the pros and cons of this model from a technology investment and ROI perspective.
Technologies commonly found in flex spaces
The types of technologies found in modern flex spaces often mirror those found in more temporary, co-working environments. First on the technology “must-have” list is the need for fast, reliable and secure access to the internet. Businesses that are most attracted to flex rental spaces tend to be small- to medium-sized organizations that are just as likely to grow as they are to contract. Thus, due to size and likelihood that business will be relatively young, most of their apps and data will be in the cloud. Their need to access the internet both wired and wirelessly throughout a flex space will be of utmost importance.
Beyond fast and reliable internet access, other technology amenities that potential flex space renters will be expecting include:
- Digital conference room booking systems
- Flat screens, digital media players and video conferencing equipment
- IP phones
- Networked printers
- Uninterrupted power systems
Additionally, the health and safety of occupants is growing in importance. Expect prospective tenants to expect features such as digital door access controls, video surveillance throughout and IoT deployments that monitor characteristics such as occupancy numbers, air quality and sanitation.
Pros of flex spaces
While co-working spaces are and likely will remain a popular option, flex spaces fill a unique niche between traditional office and co-working office space settings. Flex spaces will be for companies that want a semi-permanent location for their operations with the advantages of shorter lease commitments and basic technology amenities that they don’t need to manage themselves. For businesses that work in lean or zero-IT business models, they will be willing to pay substantially higher monthly rates for these two benefits.
Additionally, flex space technologies can be integrated into a broader “digital transformation” strategy for the building owner. Incorporating must-have flex space technologies such as high-speed networks and IoT provides the foundation for cost-saving technologies to be overlaid on top. This includes tech such as temperature/humidity sensors, intelligent HVAC systems, smart lighting and building automation systems meant to save time and money.
Cons of flex spaces
While the future of flex spaces looks bright, their risks also must be considered. For example, because flex spaces often come with shorter lease terms, they tend to attract businesses that either don’t have deep pockets or whose long-term success is questionable. Thus, it’s important to evaluate the demand for these spaces in various geographic locations to ensure that they can remain at high occupancy levels despite higher-than-typical client turnover.
A second consideration that must be assessed by the building owner is whether they want to become a technology service provider for their tenants. The amount of technology deployed within most flex spaces is substantially higher than even a few years ago. Thus, the ability to manage and upgrade technology within these spaces must be appropriately weighed. Considering the major technology skill crunch we’re currently undergoing, this may be a more difficult challenge than some expect.
Is it worth investing in flex space technology in 2022?
Careful thought must be put into whether a property is ripe for flex space adoption. Everything from property location to expected demand to technology integration/support costs must be factored. That said, if the stars properly align, a flex space technology investment can be the difference between properties that remain vacant and those that are in high demand.