The Managed Workspace Marries The Best Of Co-Working With Traditional Office Leasing
The rise of the flexible workspace is a global trend that has demanded the attention of CRE pros worldwide, but nowhere more so than in the U.S. Chicago hosts over 120 flexible workspace centers, offering both co-working and serviced offices. This is a 13% increase from 2014 and 2015, according to The Instant Group’s 2017 Global Cities report.
An average of 37% of office is categorized as co-working in Chicago, New York, Los Angeles and San Francisco. But the growth of co-working is only half the story.
Cities around the world, including Chicago, now host a number of innovative, curated workspaces that evolve the co-working model and further broaden its appeal to new types of companies and submarkets.
Enter managed workspace, a relatively new concept to the U.S. market.
Managed offices apply the principles of serviced offices to the traditional CRE leasing model, democratizing flexible workspaces. The managed workspace allows for customization of the office and services, while still offering speed to market and reducing the capital expenditure required for leased space. High-growth companies, which may have unpredictable headcounts and global expansion requirements and lack an internal real estate team, are particularly drawn to the model.
Businesses of all sizes can brand the space and roll up all their associated costs into a simple quarterly fee. According to The Instant Group's head of marketing, John Williams, this offers total transparency and assists business planning.
Companies like The Instant Group are driving the managed workspace revolution with a team experienced in office fit-out and design. They also have an extensive supply chain and servicing capabilities to help clients make informed strategic decisions. According to Williams, this includes everything from supporting growth to implementing property solutions for a specific project to expanding into new markets.
“In a fast-paced, high-stress environment like Chicago, this approach allows corporate businesses to focus on running their companies and doing their jobs, while we run the office on their behalf,” Williams said. “We run all the costs, fit-outs and leasing over a three- to five-year lease term."
The Instant Group's team leverages its network of relationships with local suppliers to facilitate the client’s fit-out. The team covers upfront capital costs, reducing the risk that the client takes on, a boon particularly for companies that have capital constraints and prefer large fixed costs being amortized into an operating expense budget. The bespoke fit-out process ensures clients can achieve the tailor-made brand effect without having to commit to significant upfront costs and long leases.
Managed workspaces have already proven to be a compelling value proposition for The Instant Group's clients, with over 40 employees in Europe, the Middle East and Africa, Williams said. It is now gaining traction in America.
“This process is always about agility,” Williams said. “We have worked with organizations from London to Kuala Lumpur, but the client’s objectives are relatively similar. They want assistance locating, procuring and operating their office space to mitigate cost and increase business agility. When office space is the second-biggest cost to most businesses, this represents a significant saving.”
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