The Elastic Office – Occupiers Are Demanding It
What is an elastic office? An elastic office can best be described as an office space that provides tenants with the flexibility to shrink and grow during their tenancy. An elastic office differs from Co-Working in that a single tenant fills the space on a fulltime basis (although some Co-Working companies—such as Novel CoWorking—do also provide elastic space). Traditional Landlords are just catching on and getting in the game, providing the tenant with the ability to grow or shrink in different spaces that the Landlord has available during the term. Instead of the tenant committing to a particular suite within a building, the tenant commits to the building itself. In turn, the Landlord commits to providing the tenant with the ability to move to a larger or smaller space during its tenancy.
I wish I had a crystal ball. I’d not only be able to predict the growth of our start-up but see its future. I’d know exactly how many people we would have and how much space we would need. Without the ability to see into the future, though, a business must remain agile. Many tech firms have no idea of their growth trajectories next month, let alone next year. Yet the traditional Landlord expects them to sign a 5+ year lease. What’s a growing occupier to do? The elastic office may be the solution, and may very well meet the needs of Landlords just as much as tenants.
Benefits of Elasticity for Landlords
- Secure long-term leases
- Grow with the company
- Get in on the ground floor and establish a relationship
To be proactive in attracting forward-thinking tenants, innovative Landlords have begun to adopt the elastic office model by building out speculative suites of different sizes. The construction is efficient and cost effective as every suite has the same finishes and a similar floor plan (which tends to be mostly open with conferencing and a kitchen). This not only keeps costs down but allows tenants to seamlessly transition from one space to another as their needs change.
With flexible real estate growing at an average of 23% each year since 2010, it’s clear that this is the type of space today’s tenants are demanding. The Landlord who can’t offer it risks being left behind.
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Written by: Kim Ford
for Coeo Space