Return-to-office mandates made headlines in 2024 as corporate giants like Amazon, Dell, and Walmart required employees to be in the office five days a week. These announcements made the news, but the reality is workplace plans vary widely. While 27% of companies plan to require full-time office work by the end of 2025, 64% are sticking with hybrid models.
For commercial real estate investors, changing work models create new opportunities to meet growing demand for flexible office space and shorter leases. Companies increasingly want the ability to scale up or down without long-term commitments, so they can adjust to changing work models. That’s why Grand View Research projects the co-working market will expand at a 15.7% CAGR through 2030.
Defining flexible office space
What exactly is flexible office space? Does it mean co-working? A rented cubicle? A temporary conference room?
The best way to define it is that it gives companies the space they need, where they need it, when they need it, and for as long as they need it.
Three key characteristics make up this adaptable workplace:
Lease agreements
Many companies don’t need a 10-year lease anymore. Some just need space for a few months to launch a new project. Others bring in teams from different cities and need a place to work for a week. Some are hiring fast and need room to grow but aren’t ready to commit long-term.
Short-term leases and adaptable spaces make that possible. Businesses can rent space for days, months, or longer without getting stuck in contracts that no longer fit.
For landlords and investors, this presents both risks and opportunities. These models can make building assets more appealing to tenants but they also affect traditional cash flow models. This approach requires a strong understanding of occupancy rates, tenant stability, and lease structuring.
Layout and design
No one wants to sit in a dull, lifeless office all day. People want a workspace that feels open, comfortable, and built for collaboration. That means spaces with casual seating, open areas to brainstorm, and spots to meet without having to reserve a conference room.
The goal isn’t just to provide desks. It’s to create a place where people actually want to work.
Types of use
Companies use on-demand workspace in different ways. Some need temporary space for a project. Others want a permanent office without the commitment of a long lease. Hybrid teams may come in on a rotating schedule and split their time between home and the office.
Nearly every industry uses on-demand offices. Tech startups use them to scale without committing to a full office. Law firms and consultants need professional meeting spaces without the overhead. Creative agencies, healthcare companies, and even government teams rely on them for collaboration and temporary project work.
With this model, investors can target a broader tenant base in multiple industries instead of depending on long-term corporate leases. A diverse tenant mix helps reduce vacancy risks and improve property performance. However, the drawback is that it can increase operational burden to support different lease commitments, changing structures, and dynamic space needs.
The office experience
A great office is more than just a place to work. If employees are going to commute, the workplace needs to offer something they can’t get at home. The best office environments go beyond desks and meeting rooms to create areas where people can connect, solve problems, and actually enjoy being at work.
Collaboration and community
Flexible offices make it easier for people to work together. Employees can connect with their own teams in open, shared spaces designed for interaction. The right environment allows for a quick brainstorming session or an informal meeting to happen naturally.
These spaces also create networking opportunities. Working alongside other companies leads to conversations that can turn into partnerships, referrals, or even new job offers. Community events and workshops bring people together in ways that don’t happen in a traditional office.
Properties that support collaboration and networking benefit from higher tenant retention rates and reduced vacancies. Tenant engagement and sense of community can also increase revenue potential, making these spaces stronger investment opportunities.
Integrated technology
Technology is built in from day one. Employees need a simple way to book desks, reserve meeting rooms, and bring in guests. Digital tools let them check availability and manage space without back-and-forth coordination.
Usage metrics help companies track how often employees come in so they can make decisions for future space planning. Fast internet, secure access, and video capabilities help support an on-going hybrid work model.
Accessible location
Office location matters just as much as what’s inside. Employees want a workplace that is easy to get to, with good public transit, walkable areas, and nearby restaurants and cafes. No one wants to be in a remote office park with nothing around.
The building itself also makes a difference. Natural light, high ceilings, and open layouts make for a better work environment. Offices in busy neighborhoods or business hubs give employees more reasons to come in, meet with clients, and stay connected to their industry.
Key takeaways
Offices aren’t going away, but companies are rethinking how they use them. When they view the office as a utility where you can turn it on and off as you need it, it aligns space with actual business needs.
With the future of work models constantly changing, the modern office needs to provide flexibility and adaptability.
Flexible leases, collaborative spaces, and technology-driven offices are shaping the next phase of commercial real estate. Understanding these trends can help investors evaluate assets, assess rental potential, and manage risks in the changing office market.
