Due to the pandemic, many companies are looking to right-size their footprint to match reduced office space needs. As they go through this process, additional flexibility in lease term should/needs to be achieved to help accommodate the current uncertainties around when people will return to the office, and how many will return when that is possible.

OfficeNetwork recently assisted a global advertising agency facing this scenario in Paris. The agency was in a six-year direct lease for 10,000 square feet, which accommodated 100 desks. Their goal was to vacate and sublease this space early and reduce their footprint to accommodate 50 desks, while also moving into a shorter and more flexible term. Additionally, finding an office solution that would deliver a dynamic work environment, be built to spec (including full company branding), be delivered in plug-and-work condition, and have no capital expenditures outlay was required.

The office needed to be close to the agency’s key clients and near transportation hubs. It had to meet the agency’s main goal of reducing rent and total occupancy costs, while providing a shorter-term commitment that could allow for scalability.

OfficeNetwork worked with the agency to find the right flexible office solution – one provided by a professional partner who could deliver what they committed to on time and within budget. The solution with the right flexible office provider and a strong record of delivering enterprise office solutions, met the company's needs. The agency was able to relocate to a location within three miles of its most important accounts, occupying a full 8,500-square-foot floor, with room for 50-70+ desks and additional support space. The space was delivered built-to-spec, 100% branded, and in turn-key condition with no capital expenditures. Total occupancy costs were reduced by 30% and the lease is a shorter 18-month term with options to renew.

Prior to the onset of the global pandemic, many multinational companies were implementing agile workplace initiatives, creating increased flexibility in how and where their employees work. While many employees and employers embraced working from home at the beginning of the pandemic, they are now realizing that the office is still a key part of operational success and employee wellbeing. At the same time, most employees have expressed the desire to continue to have the option of working from home 1-2 days per week.
When they do go in, many employees would like to be closer to home, reducing commute times and negating public transportation concerns. This has facilitated increased interest in de-densifying space, or creating a hub and spoke model. In this scenario, a company would have a smaller centralized office, with several “spoke” offices located closer to where employees live.
Flexible office solutions are a great way to execute this strategy and support workplace flexibility. Companies can avoid long term lease liabilities and investment in large capex projects by opting for pre-built flexible office spaces with lease flexibility. In addition, enterprise flexible office solutions can provide purposefully designed office space, with custom branding, and even increased safety measures, ensuring well-being.
The bottom line is that flexible office space is in demand because it offers a better alternative to long term, inflexible leased space. It allows companies to open and close locations as needed, as well as scale up or down the amount of space in each location based on employee usage. Increased flexibility (both term and size of space), reduced capital investment and an enhanced employee experience make flexible offices a long-term solution in creating a real estate portfolio that adapts to the speed of business.

OfficeNetwork Client Solution:

Client Objectives:
A US-based software company specializing in business intelligence tools and visualization, sought to provide its Singapore employees with a dynamic office environment, with a flexible structure in order to scale up or down.

Challenges:

• Source the right flex office partner able to deliver a fully demised and turnkey office solution, on time and built to spec.
• Avoid any and all CapEx outlay for the fit out.
• Achieve maximum flexibility, especially in uncertain times.
• Ensure the same look and feel as their direct-lease sites.

Results:

• Client partnered with OfficeNetwork to source top flex office providers in the market, able to deliver the desired demised office environment in plug-and-work condition.
• No CapEx outlay was required, with the chosen office provider delivering the exact space needed.
• Signed for a 24-month term, achieving maximum flexibility with the “accordion effect”, able to right-size at the 12-month anniversary by giving 6 months’ notice, and with no penalty.
• Achieved the same corporate look and feel as their other office sites, with 100% client branding, logos, and colors.

If there has been one constant since the COVID-19 pandemic began, it has been uncertainty. Companies have been forced to make decisions about their operations and real estate with little direction as to what the future might hold. Amidst this, there have also been revelations about the effectiveness of working from home and employees’ need and want for workplace flexibility. All of these factors combined have led to an increased interest in enterprise flexible office solutions, which provide opportunities for workplace customization, without long-term lease commitments. C-Suite leaders are incorporating flexible real estate solutions for sites up to 15,000 sq ft at a much greater scale than ever before, with flexibility playing a greater role in decision making.

Pandemic fallout

Part of this is a reaction to the pandemic, which caught almost every company off guard, leaving them tied to inflexible long-term leases. In a matter of weeks, they found themselves paying for footprints of all sizes, completely vacant of employees.

As companies move forward, they are responding to this by creating real estate strategies that can adjust to the changing needs of their organization, which could be influenced by both external (health, economic) and internal (employee preferences) factors. With flexible office solutions, footprints can be right-sized, and the need to pay CapEx for FFEs is negated.

Benefits of enterprise flexible solutions

- Ability to right-size space as needed
- Short-term commitment
- No need to pay CapEx for FFEs
- Onsite facilities management

Changes in the industry

Like many industries, the pandemic has caused consolidation within the flexible office sector. While there has been an overall drop in demand for co-working, providers are experiencing an uptick in enterprise corporate users. This is no surprise considering the benefits of enterprise flexible solutions, which provide the ability to right-size locations as needed – an invaluable asset during these uncertain times.

This year is the 10th anniversary of OfficeNetwork – what a perfect time to update our brand identity and website to reflect the success we’ve celebrated.

Our new identity reflects a modern, clean and simply-sophisticated brand. The green circle with our “ON” acronym symbolizes the on-button. Which is a strong metaphor for our way of doing business: We are always on, powered-up and ready to go.

Our new website is simple and clean, only touching on the key ways we support corporate real estate departments with their small offices globally. Our website is a lean resource to get you thinking about cost-effective, flexible and strategic office solutions.

Contact us today and we’ll be delighted to find the right solution for your new office or relocation.

We have been securing offices for several of our clients in this commercial center in a decongested suburb of Mumbai. The complex is of the highest international standards and houses a number of commercial buildings including NEBARD Head Office, IL&FS, Asian Heart Institute, Dow Chemicals, ICIC Bank, Citibank, Bharat Diamond Bourse, Dhirubhai Ambani International School, American School of Bombay & Fortune 500.

The surrounding area is bustling with development and amenities including the Mahim Nature Park. The Mumbai Metropolitan Region Development Authority (MMRDA) is committed to the highest international standards and amenities while creating a vibrant community and family-oriented atmosphere.

WSJ recently featured an article on the rising office rents in Hong Kong. 2010 saw a 30% increase in rents and specialists are forecasting another 30% increase in 2011.

This statistic is coupled with projections that demand will reach 3 million sq.ft. in Hong Kong's central business district while supply will be limited to just 1 million sq.ft.

In this explosive and low-vacancy market, OfficeNetwork can leverage its experience and connections to secure your optimal workspace solution.

The IASB and the FASB are developing new accounting standards that will completely overhaul the way leases are reported on financial statements, significantly impacting return on assets and other key financial ratios. The new standards would require all leases to be capitalized on the companies balance sheet and replace rent payment expense reporting with interest and depreciation expense reporting.

Contact us to discuss how we can help you structure and plan your office needs to minimize financial impact.

Flextime is a hotly-debated and undeniable trend gaining in popularity, perhaps lead by the more forward-thinking hi tech companies.

"Flex time" refers to the practice of designing a flexible work schedule for employees that breaks the mold of the traditional 9-5 workday.

Some of the main reasons for this work place renaissance include: emerging technologies, advancements in telecommuting, employee morale, and reduced overhead.

In an age of globalization, internet ubiquity and an increasing focus on customization, many employees are finding new efficiencies in a bespoke work schedule.

What do you think? Here are some links for further reading:

• Institute for Corporate Productivity
• Discovery News
• Pros and Cons of Flextime on Brighthub