How Flexible Workspaces and In-Building Tech Offer a Competitive Advantage

The current office quagmire finds employers and employees locked in a battle with long-term ramifications, as major cities still see just under 50 percent of employees back to the office at any given time. As workers stand their ground to continue working from home, office landlords are faced with the challenge of redefining the office space, and will need to find new ways to enhance revenue and occupancy. For this and other reasons, flex space is a crucial offering for office landlords looking to fill the gaps created by work-from-home and hybrid working, and landlords understand this. According to a JLL (JLL) study, flexible or coworking spaces will make up 30 percent of corporate real estate portfolios by 2030, up from just 4 percent in 2019. Iain Miln is senior vice president, business development for the East Region, for essensys, a leading global provider of software and technology for the commercial real estate industry. Partner Insights spoke to Miln about why flex space should be part of every office provider’s portfolio.

Commercial Observer: The office market is in flux, with companies wanting employees back five days a week, and employees pushing for hybrid hours. What does all this mean for the flex-space market?

Iain Miln: The challenges facing commercial real estate as it seeks to attract people back to the office are complex, but they are being overcome. One of the biggest tools that landlords and flex operators have at their disposal is utilizing in-office technology, especially those solutions that give employees a seamless and consistent user experience, which is now vital to remaining competitive in the office market.

Thanks to this technology, landlords are now able to quickly create new flexible real estate products, creating new revenue streams that ultimately increase NOI. However, it is not as simple as finding individual solutions to solve for individual pain points, as that can lead to increased complexity and expense. Having the right digital backbone behind the new products is essential to improve operational efficiency, remove the complexity of automating and managing digital services across spaces, future-proof office spaces, and make them productive places to work in the new age of hybrid working.

How have the events of the past few years changed the overall need and desire for flexible space?

It’s become fairly evident that having a flexible workspace proposition to support the changing demands of tenants is no longer regarded as just nice to have. Rather, it’s become an important part of any real estate strategy now and for the future, as tenant expectations are increasing. They’re demanding more and more from their workspaces: lots of amenities, seamless experiences, etc. They want consistency, the ability to work collaboratively, and changeable flexible spaces. They also want flexible working policies. Companies, in turn, are searching for new ways to attract and retain talent in an increasing competitive landscape. Flex space provides a productive and modern work environment for this.

How have the changes in the office sector over the last few years affected the nature of flex spaces themselves, and how have operators of these spaces had to adapt to meet the changing needs and expectations of the market?

Spaces must be move-in-ready, reducing the time to value for operators and landlords, and they must also be able to respond to occupier needs by providing secure WiFi, agile and adaptable space and support amenities, all of which must be simple to operate and manage.

Landlords are looking to stay competitive and relevant, implementing flex spaces to achieve an offering that demands a premium and provides agility and adaptability to tenant requirements, aka future-proofing. There’s a growing need to have the right technology and resources in place to enable effective scaling of the business. Technology needs to be enterprise, secure, resilient and scalable, thus enabling a competitive digital-first real estate strategy.

How is modern office technology affecting whether people are more likely to work from home or come into the office?

Great technology should exist in the background, helping to create seamless experiences for tenants, greater collaboration between teams and co-workers, and more efficient face-to-face or virtual interactions in the workplace. People are seeking these sorts of elevated working environments, which can’t be fully achieved at home. For example, WiFi shouldn’t just work in your spec suite. It should be easily accessible and secure across the entire portfolio. Technology needs to support the occupier experience, not be an extra layer of frustration. It must be offered smoothly and without interruption, making the workplace more enticing. There is an inherent need for secure and seamless connectivity — the ability to roam across the site, and to automate the provisioning and management of digital services such as user access and control. Traditionally this can be very complex and error-prone, but it doesn’t have to be. With the right technology it can be simple, secure and scalable. By having the right digital backbone to build upon, landlords and flex space operators can respond to changing market dynamics both now and in the future.

Do you think tech improvements can have a direct impact on the caliber of tenants a landlord can attract?

We wanted to know more about what was impacting tenants, so we conducted a survey of 1,000 U.S. office workers. Fifty-two percent said they were envious of smart technology available in other office buildings. The draw of in-office technology is that it can support seamless and consistent experiences, security, ESG initiatives, resilience and more. This finding should not be underestimated. It’s a growing demand which is creating an opportunity for high returns on tech-enabled spaces.

How can essensys fit into an office owner’s plan to establish the perfect tech-enabled office?

The essensys platform provides the foundation — all the software and technology — for a digital-first real estate strategy. It allows landlords and flexible workspace operators to deliver a range of differentiators — agile, flexible, and customer-specific services — to a broad base of occupiers across multiple locations. By simplifying the day-to-day management of flexible and digital-enabled spaces, the essensys platform addresses the complex operational challenges associated with delivering seamless in-building experiences portfolio-wide.

Ultimately, asset owners and operators are looking at creating a real estate strategy that not only helps them today, but also supports them as they navigate changing market dynamics. Flexibility, agility and adaptability, and the digitalization of real estate are at the forefront of today’s transformation. Increasingly, the CRE industry will be looking at sustainability and social strategies. Real estate is not static, it evolves, and the technology implemented today needs to be able to grow with it. essensys is built to support adaptability, both today and in the future.