Are you looking for commercial space within your office’s budget? Real estate for office space is costly. Finding the right location is difficult. Searching for the right workspace, and then getting utilization to the levels where it makes sense, can burn both time and money. And that’s in a “normal” year.
But, since the economic boom that followed the COVID-19 pandemic, commercial real estate budgets have been strained in response to rising office rents. The rates for office space and industrial spaces have skyrocketed, leaving businesses struggling to afford their overhead. At the same time as these rents were rising, desk utilization has been wildly inconsistent, as employees resist the idea of coming back to the office full-time.
Accordingly, companies are exploring flexible and hybrid work models like never before, and the high cost of a long-term commercial real estate lease is an increasingly tough line item to justify. Employers worldwide are stepping back to reconsider their real estate spend and their overall office strategy. They need alternatives to expensive leases on commercial real estate can help reduce cost while still providing access to high-quality, modern workspace around the world. Companies are finding that rethinking the office, and stepping into a new world of flexible workspace technology and management solutions, can foster growth and pleases talent — while supporting their ability to do global business.
Upflex is helping companies do just that. With a global network of more than 7,000 high-quality workspaces in over 80 countries, and a cutting-edge technology platform that centralizes browsing, booking, payment and space utilization management, companies — from start-ups to the Fortune 500 — are finding they a world of workspace at their fingertips, along with rich data and insights so they can design cost-saving, talent-pleasing office strategies fit for the future of work.
Here’s a look at how Upflex’s solutions, along with other modern workspace strategies, are helping companies — from startups to the Fortune 500 — reduce commercial real estate budgets and save office admin expenses.
4 ways to reduce commercial real estate costs for your company
Organizations are preparing for the post-COVID world by shifting to hybrid workplace strategies that give their talent flexibility. In order to this, their HR, real estate and facilities teams need flexibility, too: no more high real estate overhead or rigid, long-term office leases. But hybrid work models can be hard to manage: Invoicing and booking can be disorganized, and if companies have their own leases, the cost of real estate persists no matter whether employees are there five days per week or just one.
Here are some useful ways to reduce commercial real estate costs for your company:
1. If you own, consider a sale or leaseback
If you own office space, CRE experts say that a leaseback option will often be structured as an operating lease. However, it may also be treated as a capital lease in some cases. Primarily, a leaseback contract can be a capital lease if the lease has a buyback deal or provision available at a discounted price or the value of the property exceeds more than 90% of its actual price. Because an office with tenants, on average, attracts more interest from investors, this is giving businesses the opportunity to secure a valuable deal, while no longer pouring cash into an empty office space. Do your research and measure the risk if your business is considering this option.
2. Whether you own or rent, make the most of your space by re-configuring it
Moving to a location where your team can work more effectively is a long-term cost-saving measure in and of itself, despite the costs of build outs and renovations. During the Great Reshuffle, you can design a space with better functionality, enhancing your recruiting and retention efforts. You can also potentially bargain a competitive deal with your new landlord.
It might be time to explore third-party flex spaces or a global network of existing workspace providers like Upflex– to get access to workspaces optimized for both the efficiency and growth of your team. Contemporary workspaces include a good mix of individual focus areas and collaborative zones to enable productivity and team building. Platforms like Upflex provide many built-to-suit options for different organizations to enable them to customize their workspace to best suit their teams.
You can now reimagine physical offices as a place of unstructured collaboration, innovation and social anchoring with more meeting rooms and collaborative areas rather than open layouts or stuffed cubicles.
Increasingly, enterprise companies are rethinking workspace strategies and stepping away from long-term leases to reduce commercial real estate costs.
3. Use a tech solution to consolidate and centralize your workspace management
Use a platform that gives you lots of options without lots of paperwork — Companies are using Upflex to have access to hundreds of third-party flex workspace providers, from boutique brands to WeWork, without the time-consuming hassle of many different vendor contracts, expense reports, and separate invoices to process each month.
A centralized booking and payment platform not only tracks expenses but consolidates management, saving the valuable time for your employees and admin teams and, ultimately, boosting productivity.
4. Be smart & sustainable with workspace consumption
Choosing to rent your office space in a LEED-certified building, getting subsidies and grants for energy-efficiency upgrades can cut utility costs and also boost talent acquisition, as per multiple surveys proving younger workforce prioritizes companies with sustainability as a value. Attracting and retaining top talent that aligns with the company values means a great deal for HR leaders. Commercial real estate firms should invest in “modern core technology systems that are more dynamic, automated, and easy to integrate with emerging solutions,” according to a recent Deloitte industry outlook.
Automation pays for itself by saving up to 10% for buildings with annual energy costs of more than $1 million. A Dell and Intel study reveals that 44% of workers believe their current office building isn’t “smart” enough and want that to change within the next few years. This is also what tenants want. However, you are not required to completely automate your structure right away.
To eventually connect smart devices in a centralized network, start small with them. Security, HVAC, lighting, and other features can all be enhanced with smart designs, giving property managers the ability to monitor, regulate, and optimize building systems and procedures. These gadgets gather and store information that will help you make better future financial decisions.
Software and apps that make management tasks easier, such as tracking expenses, scheduling maintenance, and controlling mailroom chaos, can also free up employee time.
To reduce energy costs and to save office admin expenses, use programmable thermostats, or think about lowering the temperature by one degree in the winter and raising it by one degree in the summer. Savings of up to 3% are possible with this straightforward adjustment for each degree change. To reduce summertime heat, you can also use window film, awnings, and reflective roof coatings.
Choosing workspace partners like Upflex will help you uncover smarter solutions including hub-and-spoke offices for distributed teams, smart and green in-office designs and easier management of administrative expenses.
Take control of your commercial real estate budget
There’s never been a more critical time to start tracking desk utilization and to take direct control of your office expenses — not to mention to prioritize productive and sustainable workspace for hybrid or distributed teams. With Upflex companies are saving up to 42% on their office real estate budgets. Book a conversation with one of our team members to learn more about how our solutions can help your company.
