Published July 30, 1999 in the DENVER BUSINESS ESTATE JOURNAL
"Flexible" is The New Key Word in Office Space
by Warren Kieding
WHAT A DIFFERENCE A FEW YEARS CAN MAKE, especially in commercial real estate.
Not so long ago, corporate offices dwelled either in high-rent downtown skyscrapers or in manicured, multi-story suburban business parks. If you were a business owner, and you wanted to be a player, those were the only two options.
At the same time, quite literally on the other side of the tracks, proliferated low rent, single-story office warehouse buildings strewn along railroad lines and interstates. Nobody then seriously considered a low, sometimes windowless monolith in which to relocate an expanding corporate office. But then, nobody could really forecast how dramatically the new ways of doing business would dictate how workspaces would be designed.
The changing corporate culture
The need for alternative buildings began in the offices themselves. Static corporate organizations began to break out of rigid management hierarchies. Structure became more ad hoc and fluid in nature. Individual work became teamwork with the rapid changes in technology and global communications.
New products and services, even new companies altogether were emerging, mutating and moving on to the next generation of their existence. As these businesses became more fluid, their office spaces became more open, and flexible, and their populations far more dense than even before.
In response to this dramatic cultural shift, creative developers and their architects applied current office and density models against existing building types and discovered that enhanced warehouse space would offer an adequate, if not exceptional fit to the specific requirements of these fast moving flexible operations. They called these new proposed buildings, surprisingly, "flexible buildings," or "flexible spaces," which was later shortened to "flex spaces."
The benefits, inside and out
The purpose of the flex-space is to strike a balance between economy and value, and quality. That is, flex-spaces have to offer the tenant a competitive square footage rate, and an inviting, comfortable and efficient place to work, which directly affects retention. This lofty goal isn't a new one, so what would flex spaces offer that other buildings could not?
In general, flex-spaces are built single-story with fewer columns to accommodate more unencumbered square footage, and more and larger windows than industrial or warehouse space. It is these and other special features planned into the construction of these buildings, which make them so attractive to companies with specific flexible requirements.
On the exterior
Corporate Identity: Flex-space buildings offer the individual tenant the opportunity to create its own identity directly on the exterior of the building, and sometimes on monument signage near the building or the street.
Parking, access and security: Flex-space buildings offer a starting parking density of five spaces per every 1,000 square feet, which is considerably higher than conventional multi-story, multi-tenant ratios which start at three spaces per 1,000 square feet.
Access to flex-spaces is direct from the exterior, unencumbered by elevator lobbies and corridors. Security is completely up to the discretion of the tenant, independent of the building or other tenant occupancies.
On the interior
Multiple uses: Flex-spaces have a virtually unlimited number of uses, since many life and safety and structural issues do not apply as they do in multi-story, multi-tenant buildings. Large, contiguous-space offices with training and conferencing facilities are just some of the uses, the design and construction of which would not be restricted by more stringent fire codes, for example.
Concentrated structural dead loads, like filing systems, are easily accommodated without the cost of reinforcement.
Planning flexibility: Flex-space office buildings frequently have in excess of 150,000 square feet of contiguous space on a single floor plate which offers a tenant the maximum freedom to outfit its space with no loss in efficiency, and without having to break it up among several floors.
Tenant-controlled heating and air conditioning: Mechanical systems can be mounted directly on the single-story rooftops of flex-spaces, and individually designed according to the requirements of each tenant. This freedom is especially attractive to those tenants who have high-density office or training facilities, or who require 24-hour high-demand. Tenants have the economic benefit of paying for whatever power they need, whenever they need it without the hassles of shared occupancy.
The bottom line
The net face lease rate for flex-space on average, runs about $5.00 to $6.00 less than full-service rates for multi-story space after utilities, taxes and operating costs. This significant dollar number is largely the result of less common areas. A tenant in a flex-space building pretty much pays for the space it occupies with the exception of restrooms, which account for only about 2% of the space. Conventional multi-tenant spaces, on the other hand, have a factor of 6% to 17%, which means each tenant must share the cost of common areas, like building and elevator lobbies, corridors, and restrooms. As a package, the economy of flex-space is hard to beat, if a firm's requirements match the open, flexible options available in today's marketplace.
Flex-space isn't for every company. There will probably always be the need for downtown, high-dollar "traditional" office space, because it fills a niche for firms who must perpetuate a specific image to its clients. The same could be said for multi-story suburban office parks, as well. But for outfits flexible and fast moving enough to convey both image and economy, flex-space is an excellent fit.