The Future of Real Estate

Leveraging on-demand to de-risk future leasing decisions

March 21, 2024

A growing number of forward thinking organizations are embracing flexibility and distributed teams, which introduces new complexities in managing a real estate portfolio. Companies must now balance cost, culture, and productivity when deciding where and how employees will work. 

While the flexible workspace model provides key benefits, uncertainty can remain around perceived value, provider partnerships, and change management. So, when contract renewal discussions are on the horizon, workplace leaders often come to Desana as they need more clarity and strategic guidance.

The power of on-demand data

Everyone wants analytics on how employees are actually using flex spaces. Metrics on utilization rates, peak usage times, and amenities accessed can demonstrate the value of the flex space membership fees. Without this hard data on usage and ROI, it can be hard to justify the ongoing costs of various flex space membership, even when there is a clear benefit to teams.

Data enables smarter flex decisions on where space is needed, at what size, during what hours, and at what membership level. Quality data justifies membership fees and can provide leverage in contract negotiations. It also allows for the development of targeted workplace strategies based on how distributed teams actually use flex spaces.

Key contract renewal considerations  

Desana works with partners to gather pricing info on existing flexible workspace contracts globally, including renewal options. We then research alternative spaces available including co-working spaces, executive suites, and traditional office leases and provide a comprehensive total cost analysis to support smart business decisions. This helps partners to build a cost-benefit analysis to quantify the value of renewal vs. switching providers or arrangements and to consider the productivity impacts. 

Analyzing the factors listed below helps determine if renewal makes economic and strategic sense vs. alternatives. The goal should always be to optimize workspaces for evolving business needs.

Cost comparison

Analysis of real estate and operational costs across flexible space providers, traditional leased offices, and hybrid approaches is always an excellent starting point. Developing cost models that factor in fluctuating headcount, regional needs, and required amenities can provide additional clarity.

Workstyle alignment

Assess how well each provider's locations, amenities, technology, and configurability align with the workstyles and workforce requirements. Consider collaboration needs, employee expectations, and feature differentiation. For example, we’ve seen a huge shift towards event spaces as organizations seek purposeful connection. Does your current provider offer this?

Data access

As previously referenced, quality data is invaluable, so it is key to review data provision and format.Try and gain transparent usage data, desk booking metrics, and member engagement analytics as this helps build quality reporting. 

Membership model based on usage data

Our team will often conduct an analysis of current flexible workspace usage data across locations and identify patterns of occupancy, peak utilization times and space needs. If required we can immediately support cost savings through a "per use" membership model. This approach is popular when organizations are looking for additional flexibility and time to gather robust usage data. 

The “hub & spoke” model and memberships

When distributed teams work across multiple cities, this can present an opportunity to implement a "hub and spoke" workplace model. The main hub office is in a central location and smaller "spoke" flexible workspaces established in other cities. On-demand models, like Desana, support this approach as workspace access can be limited within a geographic parameter around permanent offices. 

The hub would serve as the main headquarters and collaboration space for company-wide initiatives, events, and cross-functional projects. Employees from spoke workspaces can periodically travel to the hub for immersive team building, training, and strategy workshops. 

Change management and on-demand success

Desana can support an employee survey to better understand needs and identify any potential concerns about the hub and spoke workplace strategy. The next step would be to create a change management plan to support adoption. 

Establishing "hub anchors" or team members who will work regularly at hub sites and serve as local leaders enables a much smoother transition. It’s also essential to hold training sessions so teams can get comfortable with new workplace tools and protocols.  Finally, one of the most important steps is to develop a feedback mechanism to gather user sentiment over the rollout process and make the relevant adjustments. 

Key elements of change management include:

  • Early and frequent communication about the hub and spoke model, including benefits to the organization and employees
  • Involving employees in the design of hub and spoke offices to increase buy-in 
  • Providing opportunities for remote employees to bond through meetings, retreats, and social events
  • Setting clear policies around flex work, travel, and technology to support distributed teams
  • Collecting feedback regularly and addressing concerns quickly

With a thoughtful approach, the hub and spoke model can unlock immense value through improved flexibility, collaboration, and employee experience. Clarifying change management plans upfront will set the initiative up for smooth adoption across the organization.

Key takeaways 

Every organization is different but there are some key tactics to try to inform future leasing considerations:

  • Leverage workspace usage data and analytics to make informed decisions on renewals. Understand daily seat utilization rates and where there is over or under capacity across locations.
  • Conduct an RFP to explore workplace membership options with other providers. Compare pricing, space design, amenities, technology, and service levels to find the best fit. 
  • Pilot a hub and spoke model in select cities, with main hubs for critical mass and focus, and flexible spokes for distributed teams. Change management will be critical to success so ensure that this is considered.