Proptech Spies Opportunity in Flex Space’s Hybrid-Driven Growth

A lot of the work could come from overseas flex operators breaking into the U.S. market and needing services


Office use may never reach pre-COVID levels, but landlords’ growing embrace of flex space is quickly advancing a hybrid work model that could eventually increase their property values.

The new paradigm is seeing a number of proptech firms working to help landlords and tenants transition to tech- infused, flexible workspaces, while venture capital firms in the sector aggressively fund such startups, experts said.

SEE ALSO: New York City Office Owners and Brokers Tout Recovery

“Two core trends that I’m seeing within proptech investment in flexible workspace right now, one is at the physical supply layer,” said Francesco De Camilli, global vice president of revenue at Valve, a London-based flexible workspace data platform that has its North America headquarters in Manhattan. “And one is at the digital layer. On the physical layer, there are many European flex operators who are expanding into the U.S., a market that’s admittedly less mature than than Europe in terms of the penetration of flex of the overall office stock.

“In the United Kingdom, Paris, Amsterdam, the overall office stock is somewhere between 7 to 10 percent flexible workspace. In the U.S. it’s closer to 2 to 3 percent, but in the most urban markets, maybe closer to 4 or 5 percent. So a lot in London and Paris see a large opportunity in the U.S. to capture market share of an emerging trend.”

A subscription-based startup founded in 2021 that collects and distributes flexible workspace data into its proprietary platform for brokers, landlords, operators, lenders, banks and architects, Valve has entered the U.S. market along with other foreign proptech firms, said De Camilli. The company raised a $4.5 million seed round in September 2022.

Among those firms looking to penetrate the U.S. office market are Kitt, a London-based provider of designed flex offices; Mindspace, a Tel Aviv-founded boutique flex-space company; and Second Home, also London-based, which owns and operates office space for entrepreneurs and creative businesses.

In addition, proptech startups such as Edinburgh-based Desana, Israel-founded Gable, and Manhattan-based Upflex are digital platforms targeting connections between consumers’ and corporations’ on-demand flex space, said De Camilli. That scalability has led to sizable Series A venture capital raises in the last year, indicating strong investor appetite for such companies.

“So there’s a consistent thesis here — that there’s a significant value to be captured by becoming the leading destination and marketplace to discover and book flexible workspace supply,” he said.

Gable started in September 2020, and established its U.S. headquarters in San Francisco. Liza Mash Levin, its CEO, describes Gable as “an all-in-one workforce management solution. We enable employees to work from anywhere by providing them access to a network of flex spaces on our platform.”

Through Gable’s platform, employees can book a hot desk, meeting space or private office, or arrange and do a video call. 

Gable raised a $12 million Series A in February from Foundation Capital, SemperVirens Venture Capital and Tishman Speyer Ventures, said Levin, who sees a huge spike in flex office space right now.

“We are partnering with over 2,000 co-working spaces on our platform, and our demand is constantly increasing,” she said. “We are expanding based on our customer demand. The overarching trend is that workplace and real estate leaders in companies are not quick to commit to long-term leases. They want to have the data to back up their decisions. They are hiring agnostic to location so their workforce is very much distributed.

“Flexibility is actually becoming a core value of companies and this is how they also attract talent. Flex is more than here to stay. We definitely think that companies are shifting towards this model at scale.”

Christelle Rohaut, CEO and co-founder of San Francisco-based Codi, a provider of private, turnkey, flexible lease office spaces, also sees flex as the future for landlords and tenants alike. The startup closed a $16 million Series A in 2022 that was led by Andreessen Horowitz partner Jeff Jordan, she said.

“The long-term lease model is no longer working for, I would say, 99 percent of companies out there,” said Rohaut. “What we’re trying to do is bridge that gap between what companies really need, which is flexibility, speed and hybrid work-friendly spaces, and what traditional commercial real estate is still set up to do, which is a five-year lease and 24/7 access.”

In contrast, Codi provides more of a “timeshare office model, where two different companies can share the same space on different days, kind of like a co-tenancy,” she said. “I believe longer term, like five years from now, this is going to become mainstream, because the data is very clear that employees are coming to the office only two or three days a week.”

The result is a plus for companies for whom the traditional office leasing process no longer works, because the investment versus use is no longer worth it, Rohaut added.

The leasing model keeps evolving for landlords, too, said Chase Garbarino, co-founder and CEO at Boston-based workplace experience operating system HqO.

“Everyone from Hines to Tishman Speyer, and all these other groups now have their own flex products within their menu of what you can buy,” said Garbarino. “So it’s no longer just the traditional lease at an asset for 10, 15, 20 years, whatever the number.”

That’s leading to a kind of symbiosis in office leasing.

“We’re starting to hear from a number of groups, and this is still pretty cutting edge, but people are thinking about, ‘Alright, if we get you to sign a long-term lease, say, for your HQ at one building, how do we include in the lease access to all of our flexible products in different cities?’ ” Garbarino said. “Because work is flexible and distributed now, and that’s what their customers ultimately need. So it’s really starting to pick up in that kind of enterprise landlord segment. It’s no longer the notable coworking brands we’re all familiar with.”

Along with traditional long-term and huge footprint leases at locations like Hudson Yards and One Vanderbilt, “which are killing it” in terms of leasing success, Vornado Realty Trust’s Penn 1 in Manhattan is an example of a traditional big landlord adapting to new models, said Garbarino.

“What Vornado has done at Penn 1, the amenity center, and the flex offices, I think they sold out the second they put them on the market,” he said. “I mean, that place is packed and it doesn’t feel like a lot of other areas of the city.”

Soon, the very term “flex office” could disappear in the commercial real estate industry, Garbarino said, as the model becomes that much more pervasive. “[I]n every other industry, all we’re talking about is the length of the contract and how many bundled services are part of it,” he said.  “I think for any landlord or management group to execute on this, they just need more digital tools in a flexible workspace as we currently know it.”

That’s the opportunity for proptech.

“There just needs to be a number of services that are provided out of the box, whether it’s Wi-Fi connectivity, the furniture and amenities, they stocked the coffee, all those things,” Garbarino said. “So when you think about the operational overhead, you need digital tooling, and in order to manage all that you also need digital tools for the tenants themselves in terms of how they book shared spaces, and access different spaces. It has certainly created a demand for digital tools.”

Philip Russo can be reached at