Flexible office space inventory makes up less than 5 percent of the office inventory in the United States. That number is projected to continue its growth trajectory towards 30 percent by 2030, according to research from JLL. That growth is well earned, as flex space is an ideal option for companies needing flexible solutions that mirror their shorter-term need for space.

What exactly constitutes that space is a definition that has been shifting for several years now. Although the flex office space concept was already changing before COVID-19, it is now experiencing a forced evolution and is poised for significant growth as businesses begin planning and executing their post-pandemic returns to the physical office.

At first blush, many confuse flex space with coworking, largely because the definition has shifted so quickly in the last couple of years. Truthfully, flex space used to be something quite different than what it is now.

Just a year and a half ago, there was coworking — and it was called coworking. It wasn't until the downfall of WeWork that there was a sudden rebranding of coworking under the umbrella of flex space, which the media was largely responsible for executing quickly. That is a large part of what makes flex space so interesting, because it used to be something else and now it includes coworking.

To understand what modern flex space is, itis essential to realize that it is so much more than just coworking space. Businesses will dictate what flex space will become based on the variety of short-term needs they will have.

Flex spaces provide companies with short-term flexibility, whether it is coworking or flex space that is managed by landlords. Flex space is set to play a strong role in the future office space landscape as tenants may be hesitant to commit to long-term leases. After all, most businesses are not sure of what their needs might be right now. That is why the definition will continue to shift, with flex space coming into its own within the next three to five years.

Flex office space is evolving

The first generation of flex space was industrial space made of offices and connected warehouse space. The next iteration was born from landlord responses to tenant demands for shorter-term leases. This movement was sparked by coworking, but also represents a natural progression in the need for businesses to be nimble and able to quickly respond to changes in the market.

Businesses decentralizing was once a factor in the growth of flex space. Now because of COVID-19, businesses are conceptualizing how their real estate will be utilized going forward. It is going to definitely change.

In years past, coworking seemed to dominate the headlines. The collapse of WeWork and the subsequent rebranding of coworking was a seismic shift in the pre-COVID-19 flex space world, which was forced to absorb coworking as one of its subsets.

Before COVID-19, coworking was growing exponentially in many large U.S. markets as Hollywood began utilizing coworking spaces for its digital content, freelancers and production talent. Denver replaced parking lots and industrial areas with coworking spaces, and metropolitan areas like Seattle and Northern Virginia experienced tech growth that fueled the use of more coworking spaces.

Post-pandemic, coworking has taken a substantial hit that will force some big changes. The compound annual growth rate (CAGR) is expected to decrease by 12.9 percent from 2019 to the end of 2020, but eventually rebound by 2023, according to Business Wire.

The flex space is about so much more than coworking, though. Today, flex could be anything from coworking to on-demand space, space for a single remote worker to a complete business unit. There 'is no hard and fast definition. It includes coworking, on-demand space, executive suites and private offices.

Essentially, everything that does not fall under the traditional long-term office lease could be deemed flex. Flex office space also includes short-term leases of three to five years and even shorter-term leases of two years or less.

These office spaces are ideal for businesses of all sizes. Flex office spaces are increasingly being used by large enterprises for swing space, temporary offices and complete business units.

While it was already evolving before COVID-19, the pandemic is forcing a faster evolution of flex space. Going forward, the demand for increased variety of flex space is expected, driven by the needs of the occupier.

Those occupying flex spaces are as varied as the spaces themselves. Occupants could be anyone from single remote workers to large corporations. The needs of a gig worker employed by a Fortune 100 company who wants an office environment differs from those of a small or large business using the space as a swing space, for example. However, in any case, those occupying flex space crave the ability to quickly respond to the changing climate.

The industry will continue evolving as many providers look to accommodate the needs of occupiers going forward. Businesses will absolutely need flex space. Commercial real estate (CRE) companies and landlords will undoubtedly be evaluating their offerings to determine how they can be more flexible with their space to provide tenants with what they need to fill the space. That is the question that everyone with office space will be looking to answer because it is either flex or be empty.

How that flexibility manifests itself will be exciting. For example, the coworking companies that remain will have to reinvent themselves. They will not be able to pack in as many people as they did before, which changes the profit model and footprint.

Coworking companies are not the only ones reinventing themselves. As flex continues its evolution, the physical office space and CRE landscape are also reinvented along with it to best respond to the needs of those utilizing those spaces.

Agility could not be more critical than it is right now. Businesses need flexibility with so many unknowns, and they need the ability to expand and contract in their space utilization to move them from their current circumstances to whatever the future might bring.

COVID-19 & the impact on flex space

Agile solutions are paramount in this post-COVID-19 world, and that 'is exactly what flex space brings. As offices everywhere closed their doors and businesses pivoted to prioritizing the health and well-being of their employees in the wake of COVID-19, the demand for flex office space changed. For example, coworking spaces have taken a substantial hit as the workers who would traditionally leverage those spaces shifted to work from home.

One of the largest ways that COVID-19 has impacted flex space is the acceleration of existing trends and the introduction of new ones. Short term challenges include offices remaining empty and employers struggling to create a plan for return to work based on all the known and unknown variables.

FMs are evaluating their needs post-COVID-19. Part of the challenge lies in trying to do projections based on a tremendous number of unknowns, including how many people will return to the physical space short-term, long-term and what structure will be needed to accommodate these workers in both instances.

Businesses and FM really do not know when workers are returning to physical office space or how many will be coming back. Many businesses and FMs are trying to make decisions based on snippets of information that come trickling in. In some cases, they must change their course of action entirely as new information emerges. For example, at one point, many businesses expected that they would be able to bring employees back in late summer. Now many of those dates have largely been pushed to 2021.

The impact of COVID-19 and the continuing changes that businesses must make in their plans create a ripple effect that not only includes employers, but also all the businesses that support them. While employers figure out their return to physical space plans, product and service providers are also assessing what the demand on them might be.

All the businesses that provide products and services to occupiers are also trying to outthink what might be asked of them. For example, CRE companies do not know how much of their portfolios might remain vacant. These questions — and any plan alterations — cascade throughout the supply chain.

Additionally, there will be new work patterns, with real estate decisions emerging from these new work patterns. In the past, these decisions always started with real estate and then fit the people into the space. Now, it will start with the people and trickle out from there to drive real estate decisions and determine what flex space needs to be.

Working safely in the office: Today & into the future

Businesses will continue working under pressure for quite some time. They have important decisions as COVID-19 forces a phased return to work. People will either continue working from home or return to the physical office incrementally either several days a week or in staggered shifts.

As things shift from responding to the pandemic to slowly recovering, a new way forward will emerge. It will likely differ from business to business. Tenants real estate needs will continue to evolve such as choices available in short-and long-term leases, healthy work environments, and agile workspaces that adjust for the work that will be performed that day, reconfigurable for tomorrow.

For many businesses, they may need to change their real estate footprint over time or branch out to other locations to make it easier to space people out. Most importantly, the behaviors on both sides — employers and employees — will need to change too. Employees want the ability to choose whether they work from home or return to the workplace. They want to be able to choose where they sit so that they feel comfortable and confident in the health of the environment.

Flex space is projected to be more important than ever, but the key to getting back to work in any office space is good data. There are so many considerations that need to be addressed to bring employees safely back into the physical office, whether that 'is today, tomorrow or a future date. Certainly, there are major decisions looming ahead not only about square footage, but also surrounding sanitization, air purification, barriers, distancing and capacity.

Being able to rely on data to make major decisions as businesses move forward is essential. Technology can facilitate that in new and innovative ways. The use of sensors and user analytics gives businesses an automated way of knowing where people sit and movement patterns around the office. This empowers them to do their own in-house contact tracing with user analytics and the user-friendly dashboard.

It also enables decision-makers to clearly see how space is being used, which provides insight into everything from the amount of square footage that is really needed to how frequently spaces need sanitization. There is tremendous power in leveraging automated data, something more businesses will want to utilize in the coming days and in the future.

How the space is being used and what space is being used to determine how much real estate they need going forward. That decision and that knowledge is more important than ever before.

Making this decision based on good data is essential to supporting long-term goals for the businesses as they reevaluate their existing footprint, consider their flex space needs and map their path forward. It puts the power of knowing when to say "when" into the hands of FM, business owners and decision-makers, giving them clarity and actionable data to scale their footprint based on new, post-pandemic usage patterns.

What is an available solution to accommodate those needs? Flex space. Moving forward, there is little choice but to embrace and develop flex space. Businesses and their employees need choices beyond just working from home or from the office. Flex space provides those innumerable in-between solutions based on the goals and challenges of each business.

The pandemic may have forced the evolution of flex to speed up, but that's a definite bonus. Flex space will support the economy of the future.