Flex Space

Commercial property that is flexible enough in its design to allow for a variety of office, retail, and/or industrial uses, “flex space,” has come a long way since its low-budget beginnings. Originally it was built as a way to hedge speculative commercial real estate developer’s bets on landing a wider range of possible tenants. In the past ten years, however, it has become its own distinct category that can command its own market lease rates.

So what is the official definition of flex space? CoStar, a national database and information exchange for the commercial real estate industry, says it is “a building designed to be versatile and may be used in combination with office, research and development, quasi-retail sales, industrial processing or high tech.” Flex buildings are usually one or two stories high with at least half the space designed for office layout, ceiling heights that can go up to 16 feet, and has some sort of overhead door delivery options (either grade level or dock high delivery doors).

The real strength of flex space is its versatility. If a company has an office use, it can build out the space with a drop ceiling. If there is a need for some retail sales, the company can create a showroom. With the current fashion favoring urban, industrial looks, this can be readily achieved in flex buildings. On the other hand, if the company needs a production, processing, or warehousing, it can use the higher ceilings to rack inventory. Some other advantages flex space has over more traditional office spaces are:

1. Uses can be mixed in a single location thereby eliminating the need for multiple sites and redundancy in support staff.
2. Often the tenant will have more control over their space’s utilities.
3. There is not usually a common area to pass through, so the access is more direct.
4. The tenant controls the security of the space which is an advantage for personal and business security since limited access points make it easier to record all ingress and egress to the building and parking is closer.
5. Flex space’s lease rates are usually quite a bit less than typical office space.

With these lower lease rates, flex spaces had traditionally been considered budget space for budget-conscious companies, but that has changed. Today it is neither simply considered a less expensive office space option, nor a more expensive warehouse space. The business community has proven that the benefit of flex space goes well beyond cheap and kinda’ pretty. The strength of its versatility and the value that brings to its owners is a better definition of this category.

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