27 September, 2018

Flexible space providers1  account for a small but rapidly growing share of major office leasing2  activity. Flexible space providers accounted for 4.4% of square footage leased in major deals in H1 2018, nearly double their share in H1 2017 and up from less than 1% in 2013. If a similar rate of growth continues, flexible space providers’ share of major leasing will surpass the legal, government and insurance sectors by mid-year 2019.

Flexible space providers have been the primary growth driver within the business services3  sector. One-third of major leases signed by business services firms in H1 2018 were flexible space providers, up from less than 7% five years earlier. Excluding flexible space providers, business services leasing activity has been relatively stable over the past five years.

Figure 1: Flexible Space Providers vs. Traditional Business Services Share of Major Leasing Activity

 

Agile-MarketFlash-FINAL-Figure1

Source: CBRE Research, Q2 2018.
Note: Includes the 25 largest transactions by sq. ft. each quarter for each of the 54 markets tracked by CBRE Research.

 

Figure 2: Major Office Leasing Activity by Industry

 

Agile-MarketFlash-FINAL-Figure2

Source: CBRE Research, Q2 2018.
Note: Includes the 25 largest transactions by sq. ft. each quarter for each of the 54 markets tracked by CBRE Research.


1A flexible space provider operates office facilities that can be transacted to third-party occupants on flexible terms.

2Includes the 25 largest transactions by sq. ft. each quarter for each of the 54 markets tracked by CBRE Research.

3Business services includes flexible space providers as well as accounting, consulting, employment services and real estate firms.

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