Searching for Flexibility in Corporate Real Estate Portfolio: Six Co-Working Strategies for User Corporations

Abstract

The increasing competitive pressures and dynamic user preferences have resulted in a fast-paced and uncertain business environment. In the face of these circumstances, organizations are looking into alternatives to incorporate flexibility to become more adaptive and responsive to change. In this line, co-working, typically associated with freelancers, entrepreneurs, and startups, has become a particularly interesting alternative in the market that has caught the attention of corporate occupiers. Therefore, the aim of this paper is to identify co-working strategies that can be implemented as part of the corporate real estate portfolio, in alignment with the flexibility demands of the organization. This nascent research topic is studied through 5 qualitative case studies including in-depth, semi-structured interviews with corporate real estate managers and related case documentation. The results evidence the different motivations that the organizations have when incorporating co-working in their property portfolio. As seen across the cases, organizations in different stages of maturity are implementing co-working as the main office location or as a temporary or complementary space solution, through six different strategies: (1) Swing Space, (2) Expansion Space, (3) Core and Flex, (4) Touchdown Space, (5) Testing Market, and (6) Temporary Projects and Staff. This research evidences that each strategy plays a specific role in the corporate real estate portfolio and implies different sources of flexibility that support the physical, functional, and financial flexibility demands of the organization.

Flexible workspaces within corporate real estate

“…The following section discusses the different patterns of adoptions found in the literature (Table 4). The models were derived from studies focused on telework (Wood, 1997), the virtual office (Stocks, 1998), taxonomies of multi-locational work (Vuokko, Kojo and Nenonen, 2015), flexible workspace strategies taken by corporations (Yang, Bisson and Sanborn, 2019;Echeverri, Jylhä and Koppels, 2021) and flexible workspace patterns taken by corporations (Campos, Schmitz and Teixeira, 2015;Weinbrenn, 2016;Arora, 2017;Bauer, 2017…”

“…The approach, also called 'serviced office', 'executive suite' (Weinbrenn, 2016), and 'private office in a co-working space' (British Council for Offices, 2019), allows rapid expansion and contraction and it is used for many reasons. It can serve as swing space, i.e., temporary space to allocate the workforce during a specific project, renovation of the main office or construction of a new one (Bauer, 2017 in Heinzel, Georgiades andEngstler, 2021;British Council for Offices, 2019;Echeverri, Jylhä and Koppels, 2021). It can also be used as a satellite office (British Council for Offices, 2019) for corporations seeking the 'hub-and-spoke' (Sargent et al, 2018) or 'core and flex' strategy (Echeverri, Jylhä and Koppels, 2021), in which the flexible workspace is complementary to a core, headquarters location.…”

“…It can serve as swing space, i.e., temporary space to allocate the workforce during a specific project, renovation of the main office or construction of a new one (Bauer, 2017 in Heinzel, Georgiades andEngstler, 2021;British Council for Offices, 2019;Echeverri, Jylhä and Koppels, 2021). It can also be used as a satellite office (British Council for Offices, 2019) for corporations seeking the 'hub-and-spoke' (Sargent et al, 2018) or 'core and flex' strategy (Echeverri, Jylhä and Koppels, 2021), in which the flexible workspace is complementary to a core, headquarters location. Such a strategy provides flexibility in the real estate portfolio for companies to address business volatility and fluctuating demand and to reconfigure their workspace, by expanding or contracting the footprint (Mcgregor, 2000;Echeverri, Jylhä and Koppels, 2021).…”

“…It can also be used as a satellite office (British Council for Offices, 2019) for corporations seeking the 'hub-and-spoke' (Sargent et al, 2018) or 'core and flex' strategy (Echeverri, Jylhä and Koppels, 2021), in which the flexible workspace is complementary to a core, headquarters location. Such a strategy provides flexibility in the real estate portfolio for companies to address business volatility and fluctuating demand and to reconfigure their workspace, by expanding or contracting the footprint (Mcgregor, 2000;Echeverri, Jylhä and Koppels, 2021). Corporations also take this model while expanding as overflow space (Weinbrenn, 2016;Echeverri, Jylhä and Koppels, 2021), to test new markets (Arora, 2017;Echeverri, Jylhä and Koppels, 2021), and as a decision instead of owning or leasing traditional office space (Josef andBlack, 2019 in Heinzel, Georgiades andEngstler, 2021).…”

Facilities Management Models, Methods and Tools

“…Echeveri et al [3] investigate corporate strategies for utilizing co-working spaces. Coworking is a fairly new phenomena and has experienced an exponential growth.…”