Agile is most commonly associated with project management, but it can also refer to a greater business philosophy. Agile, as the name implies, is about moving quickly and minimizing risk. Put in terms of the real estate industry, agile real estate is quickly replacing traditional offices as the new norm.
But what is agile real estate and what does it mean for your business? We’ll break down what you need to know about the agile real estate movement so you can better position your business for success.
What is agile real estate?
Agile real estate is a dynamic and flexible approach to the workplace needs and business objectives of an organization. Agile real estate isn’t new, but with the rise of incubators and coworking spaces, agile real estate has taken hold as a legitimate alternative to traditional office space.
So who benefits from agile real estate? Any business can take advantage of agile, but startups, growing businesses, and solopreneurs tend to value them the most. Not only does agile real estate provide a more cost-effective solution compared to traditional office spaces, but they also offer customizable term arrangements, allowing businesses to rent out space as needed. The importance of flexible office space cannot be ignored.
The advantages of agile real estate
As office rent continues to soar, the financial benefits of agile real estate become more attractive. According to commercial real estate brokerage CBRE, the average gross asking rent in the United States rose to $34.28 per square foot. Through coworking, that cost is shared with other tenants, creating a more affordable and collaborative environment.
Creative and collaborative spaces
Agile real estate doesn’t only offer alternative pricing plans, they also offer alternative workspace designs. In the case of coworking, the shared office spaces and coworking areas create totally new working environments that foster teamwork and creativity. Workers can share their ideas with one another without cubicles or dividers getting in the way. Even kitchen and dining spaces are open, encouraging workers to meet other tenants.
Dynamic and flexible
Perhaps the most attractive feature of agile real estate is its flexibility. Some places will even offer an option between coworking, shared office spaces, or private offices and suites. Business leaders can then negotiate on their final rent based on their space requirements and length of stay. For startups and growing businesses, this can be an invaluable way to plan for the year ahead.
Strategic benefits of agile real estate
Promotes a more inclusive culture
If you take a look at any incubator or coworking space, you will quickly see something missing from corporate office buildings— a sense of community. Officevibe found that in one study, 91% of coworkers had better interactions after coworking. The removal of walls and rigid space arrangements provides a more welcoming and diverse space for everyone. This, in turn, increases the sense of solidarity and community within the team.
Empowers your freelancers and remote workers
One of the more notable shifts in the way we work involves where we work. Today, our teams consist of overseas workers, digital nomads, freelancers, and other part-time workers. The common area or coworking spaces are open for use when these workers need them, saving their business the cost of a private office that’s only seldom in use.
Distributes the cost between other tenants
We’ve brought up the cost benefits of agile real estate numerous times already, but the strategic implications cannot be emphasized enough. In corporate or traditional office spaces, amenities such as printers, coffee machines, fridges, and even reception services are paid for by each individual brand. In a coworking space or incubator, workers share the amenities, but also have the option to purchase their own printer or copy machine for their private office. Tactics like this help keep overhead costs low, allowing business leaders to focus on more pressing costs.
Industries using agile real estate
Now that you are familiar with how agile real estate works, you may be wondering about real-life examples of various industries that use agile real estate. It’s worth noting that many of the brands listed below are Novel Coworking clients.
By far, the tech industry holds the largest share of coworking memberships, making up 20% of all coworking members. Even within incubators and accelerators, tech startups continue to be the most common. Since much of their work is in the digital realm, agile real estate is a useful and affordable solution for their teams. Many of these brands have their own headquarters, but set up satellite locations in coworking spaces.
Take Mozilla for example. Mozilla is best known for their Internet browser, Firefox, the second most popular browser by market share. Firefox has a major emphasis on privacy and open source technology, distinguishing it from the likes of Google Chrome and Apple’s Safari. Mozilla holds private offices in a handful of Novel Coworking locations across the country.
Another industry that loves to use the satellite office tactic: communications. We’ve seen many PR and advertising companies that enhance their geographic reach by opening offices in major hub cities like Chicago, San Diego, Charlotte, and more. Similar to tech-based startups and services, most communication brands rely on a fast Internet connection and space for computers and printers, something that can easily be found in agile real estate locations.
KlearCut Media is a great example of a modern communications company. This digital creative company assists businesses with their branding, content, and social media. KlearCut has worked with big brands, including The Bachelor and The Bachelorette, SMU Mom’s and Dad’s Club, and Dallas Hotel Magazine. You can find KlearCut operating out of the Novel Coworking Katy Building in Dallas, Texas.
Media and entertainment
Agile real estate providers have been creative bastions for media and entertainment companies. The open office design and welcoming community create ample opportunity for networking and collaboration. Whether you’re a content creator or a major entertainment enterprise, agile real estate has something for you.
You may not have heard of Babaroga, but you’ve likely heard or even played one of their many games. From the Deal or No Deal iOS Game, to EA Sports’ Tiger Woods PGA Tour 09, to their upcoming Ghostbusters VR title, Babaroga has set the standard for mobile gaming. They’ve even received awards from IGN, the Academy of Interactive Arts & Sciences, and Pocket Gamer. Babaroga is based in Novel Coworking’s The Loop location in downtown Chicago.
Don’t assume that technology and media companies hold a monopoly on agile real estate. Financial service companies can benefit tremendously from agile real estate. With low rental costs and increased exposure to networking opportunities, there are many advantages to agile real estate that serve the financial industry.
Our Novel Coworking Trinity Place location is host to Bank of Colorado, one of the oldest banks in Colorado. Bank of Colorado is completely family owned since the Great Depression, and while their name has changed over the years, they remain a popular fixture within the Colorado community. They service individuals throughout the Eastern Plains, the Front Range, the Western Slope, and the Four Corners Region.
Types of flexible workspaces
Coworking office spaces/Shared office spaces
We’ve spoken extensively about coworking, and for good reason. Coworking is the reason that agile real estate has become as ubiquitous today than ever before. If you’re looking for the utmost flexibility, coworking is the way to go. With options for a short or long-term lease, reduced costs, and access to a vibrant community, coworking remains the ideal agile real estate model.
Agile real estate isn’t limited to coworking spaces or incubators. Some coworking providers (such as Novel Coworking) offer private offices available for rent, that include perks such as printing, mailing, and management services. In most cases, these offices are usually long-term leases, ranging from several months to a few years. Serviced offices provide the same benefits as a traditional office, offered at a similar cost structure as coworking.
For much larger businesses, agile real estate offers a myriad of solutions, from spacious office suites to multiple private offices. In addition to more space, they often have their own kitchen area or lounge. Most providers ask for long-term leases for larger suites.
Distinct from the other agile real estate options mentioned, incubators are specifically geared towards assisting startups. They typically provide low rent and services for ensuring the development and growth of a startup. Incubators are not for everyone- some incubators require a complex application process or only offer services for a few months.
Agile real estate is part of a much greater movement towards safer, more affordable, and more inclusive workspaces. Why should a young, growing business have to worry about being able to pay office space rent? In reality, they should be able to have a space to conduct their work and meet others at a reasonable rate, so they can allocate more spend toward paying employees or improving their product or service.
Fortunately, the agile real estate model is here to stay. As rent continues to increase and people continue to develop startups, flexible and dynamic workspace will be in high demand. Take a look at your own office solution. Is it meeting the needs of your business? Perhaps an agile approach is just what you need to keep your business nimble.
Agile real estate is part of a bigger strategy around managing your talent. Read Novel Coworking’s comprehensive guide on talent management here.
For more content on running your business and setting yourself up for success, read Novel Coworking’s blog each week.