The Growth of Flexible Office Market in Houston
This has caused uncertainty for many companies – they don’t know how much office space they’ll need to rent in the future, or how they should plan to use it.
What does the future look like?
Some experts have theorized that the widespread adoption of remote technologies will lead to permanent downsizing of office space for Houston companies. And businesses now facing uncertain financial futures will be less inclined to increase their square footage; instead, they’re more likely to decrease it by 25% or 50%.
Other developers believe the long-term change in staff numbers will be unnoticeable, especially once a vaccine becomes widely available. They predict that people will return to work more and more from then on.
The truth is, no one knows exactly what to expect, so office leases need to adapt to suit the new commercial landscape. Precarious corporations are now likely to opt for smaller, less centralized office set-ups for their staff. Another significant challenge will be how to reallocate space and its function so that employees can work together, safely and socially-distanced.
What is flexible office?
‘Flexible office’ is the term for a workplace that gives the tenants flexibility over the location, size, term, and additional services. It represents a viable solution to the current challenges of COVID-19 for many firms.
Flexible office availability in Houston
Houston currently has around 2.2M square feet of flexible office space. This way of working has slowly seen an increased presence, and the trend is predicted to continue. Companies in Houston with upcoming lease renewals are now considering flexible office space for their employees over a more traditional, longer lease.
And companies that set up in Houston during the pandemic will have more than sufficient selection of office spaces to choose from. Almost 1/5th of Houston’s office space sat vacant during the third quarter of 2020. Many of these available buildings were built in the 1970s and 1980s, so they need significant improvements. If Houston wants to rise to the challenge of homing new businesses successfully during COVID-19, landlords will need to perform the necessary renovations.
What’s happening to Houston’s flexible office?
Coworking, a popular flexible office feature, is the sharing of used space with no fixed desks. Recently, it has faced the difficult challenge of maintaining its value whilst allowing tenants to keep a safe distance from one another. Flexible office facilities that offer private offices, on the other hand, have had a headstart, as they automatically offer the desired space and separation.
What’s more, flexible workspace inquiries have increased outside of the office-heavy areas of Downtown Houston, Westchase and Uptown. This suggests people want to work away from home, but still closer to the suburbs than in a more corporate, central city location.
And, although there have been plenty of delays within the market during the pandemic, new flexible working developments are still being completed. Texas Tower and Tower One of Village Towers both welcomed their first tenants this year.
It’s clear that the availability of flexible offices to lease will be essential for the future success of the Houston commercial real estate market.