In Uncertain Times, Occupiers Turn To Flexible Providers Like WeWork To Future-Proof Their Office Strategies

Faced by stubborn inflation, tariff whiplash and general economic uncertainty, corporate real estate teams are strategically reevaluating their office footprints, said Luke Robinson, regional president for North America at WeWork.

“The majority of corporate occupiers we work with, or what we call our enterprise clients, are planning to shift 20 percent of their portfolios to flex,” Robinson said. “And with added uncertainty in the market, we forecast that number will grow.”

As a result, flexible office providers such as WeWork are seeing increased demand for their product.

“Companies are seeking flexibility in terms of cost and term commitments, which better equip them to navigate shifting business needs,” Robinson said. “While flexible space isn’t likely to dominate a company’s corporate portfolio when it comes to large, Fortune 500-size companies in the near future, it continues to grow in importance.”

In 2024, 42% of 225 corporate real estate executives overseeing office portfolios across the U.S., Canada and Latin America who were polled by CBRE said that flex space makes up more than 10% of their portfolios. That’s up from 36% of respondents in 2024.

For smaller businesses, start-ups and freelancers, the shift to flexibility is decidedly more pronounced and protective.

“Flexible workspaces uniquely enable companies to scale up, down or relocate as needed,” Robinson said. “Smaller companies especially find enormous value in drop-in access and the ability to make shorter-term commitments, allowing them to easily adapt their office strategy to fit their evolving business needs.”

Return-To-Office Strategies Amid Prolonged Periods of Uncertainty

Heightened economic pressure and changing markets aren’t just impacting companies' bottom lines but also how they plan their real estate portfolios for the future, Robinson said.

“If there’s a period of prolonged economic turbulence, it will significantly impact plans,” Robinson said. “Instability creates hesitation and can slow down decision-making for companies of all sizes — all while critical business decisions need to be made in real time.” 

This slowdown is coinciding with a renewed push for employees to return to the office, which is forcing companies to balance their need for in-person collaboration with the risk of making new, long-term and cost-prohibitive real estate commitments, he said.

“In this economic climate, a company’s single largest expense other than headcount — a long-term lease or office ownership — becomes harder to justify for many companies, especially ones that can’t forecast their headcount or business needs like they used to,” Robinson said.

Agility As A Competitive Advantage

The level of risk tolerance is changing how executives are thinking about their office strategies and, in particular, increasing their appetite for flexible workspaces, he said.

“When there’s uncertainty in the market and added pressure on businesses to perform, chief financial officers and boards of directors are much less inclined to approve multimillion-dollar capital investments in office space,” Robinson said. “They’re still pushing for RTO but optimizing for flexibility—that’s where our flexible real estate platform has been a key solution for companies of all sizes.”

Flexible office providers help companies de-risk decisions around real estate, budgeting and headcount through a hospitality- and technology-driven business model, allowing them to strategically manage evolving business objectives and limit capital expenditure costs, Robinson said.

“Agility is a competitive advantage,” Robinson said. “We offer a global platform that can support any requirement, from one desk to an entire company headquarters for the day, month, or on a longer term—enabling businesses to scale their space up or down as needed.”

For small or medium-sized businesses, the flexible model has always been the best option, Robinson noted.

“For these kinds of companies and for freelancers, predicting what’s going to happen in three, six or nine months has already been tough and always will be,” Robinson said.

While traditional, long-term office leases are far from obsolete, especially for company headquarters, the proportion of company portfolios that comprise flex space is growing and is expected to continue to do so, Robinson said.

In a survey of 500 business decision-makers conducted in mid-2024, WeWork and market research firm Vanson Bourne found that 82% of fully in-office and 76% of hybrid companies polled said their workplace strategy positively impacted employee productivity, compared to just two-thirds of remote organizations.

When prioritizing office space as a way to foster company culture, “most are prioritizing flexible workspaces,” the survey found. Of the companies polled, 59% planned to expand their physical footprints through coworking or flexible office locations.

“With the way people work now, and between travel and work-from-home, it’s hard to predict who needs an office where and for how long,” he said. “Whether you’re a solo entrepreneur or a 1,000-person company, flexible workspace has a useful place in your portfolio.”

By leveraging coworking memberships and flex space, companies can support a distributed workforce, control costs and reduce risk by aligning their footprints with real usage needs.

“Companies are looking for a bridge between the present and the future, a solution that positions them for success and can evolve with them,” Robinson said. “Flex is that bridge.” 

This article was produced in collaboration between WeWork and Studio B. Bisnow news staff was not involved in the production of this content. 

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