In an evolving commercial real estate market, location is key for flexible workspace success, driving demand and revenue.
The world of commercial real estate is evolving faster than ever, but one truth never changes: location still drives everything. Finding the right site is vital for any successful flexible workspace provider, not just to boost demand and membership, but ultimately to drive revenue. A subpar location can derail an otherwise functional space. But how can you find the best location for your next flexible workspace as you grow?
Many experienced space providers rely on generally available information, such as employment or demographic data, to determine a building’s potential as the best flexible workspace location. They can use the same information to analyze a potential property transaction. But how do you predict if the right members will come to your space? Can you compete with existing locations in the area? Can you charge enough to cover expenses and create a profitable business?
The Instant Group’s insights and data provide the detail you need to capitalize on market trends and drive growth – without time-intensive and inaccurate mystery shopping. That’s why the industry’s most data-driven space providers rely on us to help them choose their next-gen spaces. Based on our experience, we believe five main factors make for a prime flexible workspace location:
Flex demand
Flex is all about convenience, so selecting an asset in an accessible location is essential. Demand for flexible workspaces largely fluctuates from market to market and is dependent on many factors. For example, in previous years we’ve seen high demand shift from CBDs of large cities and close to transportation hubs to more recent growth in suburban towns. What’s critical is for the site to be easy to commute to for your target demographics and companies, and close to a central location near public transit or major highways.
Instant’s data aggregates demand trends across markets and regions, providing actionable insights to help providers identify buildings and assets in high-demand locations.
Local competition
Understanding what you’re up against in a particular market is key. If a city or neighborhood is already saturated with flexible workspaces, opening another shared office may not make commercial sense. That’s why, when you’ve identified a potential new location, Instant’s insights and unique data capabilities allow you to analyze the local competition, adjust your pricing based on prevailing rates, and capture a bigger share of demand.
Occupancy rates in the area
Occupancy rates are the best predictor of an operator’s short-term success or failure. So, when you’re considering a new location to grow your flex space operation you need to analyze them carefully. Locations with high occupancy indicate a healthy market that could absorb more space. Low occupancy rates point to a lagging market where demand currently outstrips supply.
Instant provides reliable, recurring data on occupancy rates* that enables flexible workspace providers to assess the health of the market and identify opportunities for expansion.
Hone your pricing strategy
Once you’ve established that an area is a good fit, it’s time to consider the budget. To stay profitable, you need to achieve high occupancy at a competitive rate. Instant’s insights and data help you set prices for private offices – and forget about mystery shopping – you’ll be able to track pricing against the market over time.
Get real about costs
Build-out costs for your new property can be steep. Expect to pay between $175 and $275 per square foot to convert a building into a flexible workspace. However, you can reduce costs by buying an underutilized traditional office building, allowing you to charge less or add amenities to attract clients. Alternatively, taking over an existing flexible workspace can save you setup costs, with expenses ranging from $100 to $200 per square foot depending on the layout’s conduciveness to flexibility. The wide range of transition space costs is influenced by factors such as provided furniture, tech needs, debranding, and the removal of any appliances.
In any case, when you’re choosing a location, consider the quality of available real estate in the area. Instant’s insights and data help you find and assess the viability of new locations and evaluate new markets with localized data sets to manage real estate costs effectively.
The science of finding new locations
Instant’s insights provide a new approach to evaluating flexible workspace locations. Leveraging comprehensive market data on demand, competition, occupancy, and pricing assesses profitability and overall viability for your next flex location. Identify flexible workspaces that have closed due to lapsed or broken leases and spot pricing trends to forecast revenue and search locations based on demand and market competition. We take the legwork out of mystery shopping, helping you make faster, smarter real estate decisions.
*Occupancy rate data only available in select regions
