The most recent monthly national office report released by CommercialEdge looked at growth in the office sector across several avenues. Among the most the most notable was the continued effect of hybrid work and increased flexibility trends on the office sector.

Specifically, CommercialEdge analysts found that tenants’ flight to quality and desire for more flexible, shorter-term leases — as well as sustained hybrid work arrangements — have been driving rapidly increasing demand for flexible office space. In fact, a joint study conducted by WeWork and Cushman & Wakefield found that the workforce accounted for a great deal of the rising demand and that working near home is cementing itself as the new preference for the best balance of life and work for many people. To that end, the survey found that coworking members operating from WeWork offices spent an average of 40% of their work time there, but that they anticipated that they would be increasing that number to 55% in the future.

Additional analysis of surveys conducted by several major brokerages revealed that this trend is confidently expected to continue to grow for several years to come. Consequently, commercial real estate brokerages have reported plans to increase their investments in the coworking sector. Several renowned brands have even formed strategic partnerships with major coworking space providers: They’re combining coworking communities’ hospitality technology with traditional asset and facilities management services to rapidly expand the availability of existing coworking spaces across the country.

Furthermore, a notable segment of the corporate real estate decision-makers surveyed stated that they intended to increase their investment in flex space and make it a significant portion of their real estate portfolios within the next two to three years. Similarly, property owners confronted with lingering vacancies have also reportedly considered operating their own coworking spaces to restore occupancy and cash flow. While those that have the capital required for high-quality coworking buildouts can create their own coworking brands, smaller property owners might consider partnering with dedicated coworking operators, instead. With this in mind, the report noted that management agreements allowing owners and flex space operators to share revenue could prove to be an acceptable solution and rise to become a new norm in the business.

Visit the full October national office rents report to find out more about office sector trends rising across the U.S. in the wake of the pandemic, as well as how market fundamentals have fared so far this fall.

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