In an interview with Curbed, WeWork’s chief growth officer, Dave Fano, asserts “in the long-term, companies won’t own and operate their own headquarters.” A bold statement perhaps, but is Fano simply trend-spotting what CBRE terms “solving for agility” in corporate real estate? As mid-sized and larger companies turn to solutions like headquarters by WeWork for flexible, private office space, we look at what’s driving the trend.
in the long-term, companies won’t own and operate their own headquartersDave Fano, Chief Growth Officer – WeWork
The challenge for corporate real estate seekers
Finding a new space for your corporate offices is time consuming and expensive, and will require making a number of concessions around your company’s ability to stay agile including:
- Length of lease terms (typically 10-year or 3-5 year agreements)
- Lack of flexibility when your needs change (up- or downsizing)
- Compromising on your desired location (accessibility or not to “hot” markets)
- Space design including build-out, branding and space amenities
Austin Tenant Advisors puts it this way: “Depending on the space and building you are interested in, your only option may be a 3-5 year lease or longer. If the space needs a lot of build out and you are asking the landlord to pay for most of that, then expect to have to sign a longer term lease. If the market is hot and there is a lot of interest in the space you want, then expect to sign a longer lease.”
In short, the more you want from your corporate office space, the more it’s going to cost you in a traditional lease agreement, and the less agile you will become.
Is flexible private office space key to staying competitive?
The latest Americas Occupier Survey from CBRE indicates flexible headquarters space is more indicative of the norm, versus a trend, with corporate real estate executives focused on staying agile to compete. Some key data points from the survey show:
- The majority are looking for creative solutions and lease flexibility
- 81% perceive amenities as essential to a positive employee experience
- 52% are phasing in unassigned seating for maximum space efficiency
WeWork’s Fano told TechCrunch, “To better meet the needs of these companies, headquarters by WeWork offers private office floors (leased and managed by WeWork) that companies can move into for flexible leasing periods — typically for a minimum of 12-24 months. But, should a company outgrow its space in six months, WeWork will work to accommodate a move to support its growth.”
Office space flexibility also equates to agile team building
One of the surprising operational benefits of setting up corporate offices in flex space is the ability to hire and test out new teams. Flex office space gives your company access to top talent pools in hot markets, and provides your team the opportunity to test out their productivity in a way that has far less economic impact on all.
Coworking Resources Magazine describes the advantages this way, “The landscape of office real estate is changing dramatically, which is a modern trend aimed at enhancing the job satisfaction and productivity of millennial employees. Large corporations often hire small and agile teams and test new partnerships with a high degree of uncertainty, making 10-year leases with office buildings impractical. Big corporations are switching to shared workspaces for their easier logistics and more flexible terms.”
Headquarters by WeWork is not just for start-ups
Many large, well-established corporations are embracing the concept of flexible office space that they can customize to their needs. Tech giant IBM has been an early adopter of headquarters by WeWork, with IBM leasing an entire WeWork building in Greenwich Village, New York. Amazon in Boston and Airbnb in Berlin are also recent additions to the WeWork roster of clients, along with Sprint’s headquarters redesign in Overland Park, Kansas.
For these enterprises, flexible, private office space makes perfect sense. Headquarters by WeWork affords them the agility they seek with flexible lease terms, access to great locations for business and associated talent pool, and the kinds of amenities that build employee retention and help companies thrive.