Macroeconomic and structural changes in the working world are driving unprecedented change in occupier real estate strategies.
Recent research unveiled that a mere 14% of occupiers believe their workspace portfolios align to their business strategies and objectives. What’s clear is that today’s workspaces are falling short of meeting occupier requirements.
While this is true, and proven by research, it’s also likely that today’s occupiers – shaken by the pandemic and jolted into the work-from-home/anywhere and hybrid revolution – don’t fully know the range of workspace solutions available to them.
We recently released our Glossary of Flexible Office Space Terms based on over 23 years of expertise in this sector. Depending on company size and real estate requirements, coworking space or shorter leases are not the only options to deliver flexibility and agility. Managed office space is an alternative to unlocking flexibility without sacrificing brand, employee experience, and business efficiency.
In this article, we explore what a managed office space is and why it can provide a smarter way to work for your business.
Contents
- What is a managed office?
- Who are managed offices for?
- How to know if a managed office is a fit for your business
What is a managed office?
A managed office is a fully customizable private workspace built to meet each occupier’s requirements and managed by a single provider from move-in to move-out. From sourcing the property and landlord lease negotiation to designing and branding the space, managed office providers typically deliver flexible contracts ranging from 12 months to five years, though longer terms are available.
A managed office space is taken care of by a single third-party provider, which means that the cost of office furniture, additional fittings, maintenance, hospitality, utilities, and even exit costs are all included and managed within a fixed monthly or quarterly rent price.
Who are managed offices for?
Managed office spaces are a fit-for-purpose solution for companies requiring over 10,000 square feet of shared office space to accommodate more than 50 to 100 employees. Project-driven businesses such as construction companies or government agencies in need of office space near a project site during a specific time period are two types of occupiers who would benefit from a managed office space.
When a serviced office can’t accommodate large teams, and long-term traditional leases are disproportionate in both lease length and occupation timescales, managed office spaces are the best alternative. Already, many large corporate occupiers with global teams in key markets leverage managed space to ensure flexibility while maintaining a level of consistency across their real estate portfolio.
How to know if a managed office is a fit for your business
1. When you have a limited or no in-house real estate team
When your business expertise isn’t real estate, delivering an office can be costly and result in a burdensome overhead for a workspace that can quickly become obsolete.
From architecture and design to fit-out and day-to-day management, a purposeful office space requires a proper real estate arm to be effectively planned, delivered, and maintained. Post-pandemic, many companies dramatically reduced their real estate teams, down- and right-sized their workspace assets, and shifted to a more holistic portfolio management approach with input from finance and human resources.
For these companies, a managed office delivery partner serves as the real estate arm in delivering the workspaces you need, where and when you need them.
2. When capability and capacity are blockers
When facing the complexities of expanding to new markets, real estate can be one of the trickiest issues to solve for. HQ-based real estate teams often encounter limited capability to deliver managed workspace in other markets. A common challenge for real estate teams is establishing a reliable supply chain on the ground in new regions.
Fortunately, a managed office delivery partner can serve as an extension of the capabilities of an existing real estate team, bringing the benefit of a proven supply chain that can deliver on the full scope of project specifications.
The capacity to deliver workspace projects on time and to spec can be daunting for real estate teams as they navigate market complexities and constantly evolving business requirements. They are responsible for ensuring their offices embody company culture, meeting security, and safety regulations, providing for the health, well-being, and productivity of their employees, all whilst aligning to requirements for flexibility and agility, and consistency across the portfolio. These demands add up – so much so that an outsourced managed workspace is often the best alternative to in-house delivery.
3. When time is of the essence
Business moves at the speed of lighting – unlike the pace of traditional real estate. When business milestones like global expansion, project deadlines, or a new client win in a foreign market set off the need to deploy a team and open a new office, there’s no luxury of time. Likewise, short-term projects with requirements beyond what a serviced office can accommodate drive the need for a custom workspace solution with its own lease structure and fit-out.
Speed to execution and length of occupation are two considerations that can render existing real estate procurement processes and supply chains inadequate. The standard time of 12 to 18 months it takes to search for, fit out, and deliver a workspace is disproportionate to the length of required occupation – especially from a cost perspective. Managed office spaces remove the organization from the process to execute on time while investing less in delivery and achieving a better outcome.
4. When it’s not just about flexibility
Today’s office users want more flexibility and agility. This was accelerated by the pandemic and evolved into activity based and hybrid working trends. While there is an obvious shift towards flexibility, many corporate real estate decision-makers are still slightly hesitant about the terminology, because it doesn’t traditionally fit into pre-established, long-term real estate processes and strategies.
Through a managed office solution, however, a corporate occupier can achieve a midway solution that doesn’t completely relinquish control over their office portfolio to flexible workspace or coworking space options.
A managed office is a flexible vehicle that allows them to buy leases and occupy the type of workspace fit for the company’s objectives on more flexible and dynamic terms. It enables leasing activity to align to occupancy and procurement objectives while staying within budget and meeting employee demands.
For many occupiers, a managed office is the missing piece to a truly hybrid real estate strategy. They just don’t know it yet. To learn more about this shared office space solution, contact our team.
