Explosive population growth that far outpaced the projections coupled with the lowest inventory of major cities for flex space has drawn the attention of many major developers into the area, with new projects in the greater Boston area being announced every week. Our company is based out of Boston and many of our investments are in this area. This presents a great opportunity for the savvy real estate investor to get into this space and repurpose or develop new flex space in the coming decade. That’s why, as of the writing of this article, less than 5% of the office stock in the United States is flex space. Some of the key points driving the desirability of flex space are:Ĭommercial real estate development trends move slowly, so the supply has yet to catch up with the demand. If their building wasn’t sufficiently adaptable, it risked heightened vacancy periods in such situations and businesses have the ability to make the space their own by adding new features at the time of their occupancy. Investors and building owners also desired increased flexibility when leases with their current tenants expired. An example of this may be a medical consulting company that needs to create specialized laboratory spaces as they conduct research on different topics over time.

With long lease terms, they have plans in place to repurpose components of the property as their business evolves. Many companies will specifically target flex spaces because of the lower cost of converting the space in different ways over the course of their lease. These factors have driven a surge in demand from a variety of tenant types, from the life sciences sector that requires both a laboratory and office component, to a manufacturer that produces baked goods in the manufacturing component, then sells and interfaces with customers directly through a retail, and perhaps even management and other employees working within an office component.Ĭompanies also may need to adapt as they grow over the years. Manufacturing components such as loading docks and warehouses were strategically located away from the main office worker access, with more parking and accessibility for the office or retail workers.

“Flex Spaces” started evolving over the past thirty years from traditional industrial buildings with a utilitarian design for shipping and receiving manufactured or distributed products.Īs the years went on and this practice became more commonplace, office workers began to be centralized in the same locations.

Flex type property