Why Is NYC The Site Of The Largest Growth In Flexible Workspaces In The World?
The rise of the flexible workspace is a global trend that has the attention of everyone in commercial real estate, but nowhere more so than in New York City. NYC hosts over 300 flexible workspace centers, offering both co-working and serviced offices, the highest number of any city in the world.
Almost half of the total flexible workplaces in New York City are now listed as co-working spaces, demonstrating the rapid evolution from executive suites and cubicles of the recent past to a new model. This model is driving significant growth, with supply increasing 24% from 2015 to 2016, according to The Instant Group, the highest growth rate in the world in one of its most mature markets.
Co-working has quickly permeated the flexible workspace markets of key U.S. cities. An average of 37% of space in New York, Los Angeles, Chicago and San Francisco can now be described as co-working, according to a report by PwC.
But the growth of co-working is only half the story.
Cities around the world, including New York, are seeing a rise in flexible work and experimenting with innovative, curated workspaces. Global cities like London, Hong Kong, Singapore and Sydney are leading the charge, but the Big Apple is still an epicenter for this brave new world of agile workspace.
Corporate clients are seeing the speed to market that flexible workspace offers and are looking for similar solutions that fit their business profile. High-growth companies, which may have unpredictable headcounts, global expansion requirements or firms that do not have an internal real estate team appreciate the all-inclusive nature of flexible workspace procurement, and now want to buy leased space in the same way.
Relatively new to the U.S. market is the concept of managed workspace. The Managed Workspace — originated by The Instant Group — applies the principles of serviced offices to the traditional commercial real estate model. It takes flexible workspaces to the next level by applying a relatively simple concept: the customization of the workspace and services, while still offering speed to market and reducing the capital expenditure of leased space.
Enterprises of all sizes increasingly demand office space to be customized to their creative and business requirements but flexible workspace providers do not offer the ability to change up the space, particularly on short notice. With a Managed Office, they can brand the space to the requirements and roll up all their associated costs into a simple quarterly fee. This offers total transparency across the terms of the deal, which in turn assists business planning.
By understanding clients’ business objectives and goals, a team of specialists from Instant sources and curates a workspace tailored to the client. The team draws on 15 years of field experience to draw on an extensive supply chain and servicing capabilities, helping clients make informed strategic decisions about their next move.
This can include anything from supporting growth in one space, implementing property solutions for a specific project or expanding into new markets.
“In a fast-paced, high-stress environment like New York, this approach allows corporate businesses to focus on running their companies and doing their jobs, while we run the office on their behalf,” Instant Group head of marketing John Williams said. “We run all the costs, fit-outs and leasing over a three- to five-year lease term."
The team acts as an arm of the clients’ own internal teams, offering market insight and a low-risk product through a single point of contact. Instant does not speculate on long-term leases before multi-letting. Therefore, clients do not have to fund any void periods in the leases as they would in co-working agreements.
Instant Group's team facilitates the creation of the client’s fit-out through a network of relationships with local suppliers. It covers upfront capital costs, reducing the risk the client takes on; a boon for newer companies that have capital constraints and prefer large fixed costs being amortized into an OPEX budget.
“Everything we deliver combines market expertise with a thorough understanding of our clients’ business,” Williams said. “This way, the space is always tailored to their needs and designed for optimum flexibility.”
The Instant Group specializes in helping clients achieve flexibility within their real estate portfolios. Whether that is through the vast third-party market, working in tandem with providers like WeWork, Industrious, WorkBetter and matching clients with the over 15,000 providers in their network, or Instant partnering to secure the type, length of lease term, number and quality of amenities and spaces for their clients.
Instant has worked with a number of global organizations to place them in managed offices. In London, the company secured Avaya and CH2M managed offices with flexible and engaging environments customized to their business needs. Instant works closely with their clients to ensure a tailored service, locating, procuring and operating their office space.
In the last 12 months alone, Instant has increased its global delivery of managed offices in 10 new countries — a growth of 18% — demonstrating a healthy appetite for this type of space around the world.
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, which can surely only be a good thing. For firms with over 40 employees searching for turnkey space, this has proven to be a compelling proposition for clients in EMEA and is now being introduced to the NYC market.
To learn more about this Bisnow content partner, click here.