In a downturn, the fate of flexible operators will be determined by landlords, as they will choose whether or not to share the risks and rewards.
The report takes a close look at how flexible workspace offerings have caused a structural shift in the U.S. real estate industry and it also explores the potential growth opportunities of the sector, as well as how it may fare in a recession.
Flexible workspaces have become the new normal, both among companies and building owners.
Currently, flexible space accounts for just under 2% of total U.S. office inventory.
Most markets have higher levels of flexible space penetration in Class A buildings, and yet 38% of flexible workspace supply is found in Class B and Class C buildings.
Let’s Talk Recession In CBRE’s words, “a recession will affect the supply-and-demand dynamics of the flexible office market just as much as it will the traditional office market.” While it will likely dampen demand for flexible space and the number of providers is likely to shrink, the industry as a whole is expected to survive.
Some flexible workspace operators will survive and others will not, especially because profit will be harder to sustain in a market with declining rents.