Agile offices: Redefining leasing with a hybrid touch

The office has shifted from an obligation to a destination—leasing strategy should follow suit

The Square at 717 Texas Tower - Houston
Caption The Square at 717 Texas Tower - Houston

What’s the Point?

Employee habits are changing, and design is not the only thing that needs to evolve to keep up. In a world of agile work, conventional leasing structures may no longer be the right fit for many companies. Enter flexible leasing, a powerful new way for businesses to drive experience, efficiency and performance in the future of work.

Changing occupancy, changing lease strategy

In the ongoing move to flexible work, many organizations have been stuck on a roller coaster of workplace occupancy. Depending on the day, week or month, some offices sit half-empty, while at other times, they are overcrowded. Every now and then, the space is filled with just the right number of people – but it is anyone’s bet when that will happen again.

Is there an off-ramp from this dilemma? Part of the answer comes from data – specifically, tracking daily office utilization rates. Armed with this data, leaseholders gain powerful insight into how much and what kind of space their company really needs, and when it needs it. As a direct result, trends suggest that many corporate occupiers plan to reduce the square footage of long-term office space—while taking steps to augment it with a mix of additional mid-term, short-term and on-demand space.

All this calls for a new approach to leasing strategy. Why? Historically, a company would lease space to accommodate current headcount and general company growth projections. In this highly static process, the 10- to-15-year lease took months to negotiate, involved dozens of people, and was forgotten about until a year before it was time to renew.

Now, however, companies are reallocating square footage to deliver smaller headquarters, along with additional options like coworking spaces and short-term “swing” spaces. For a variety of reasons, it makes more business sense to lease space from a single landlord where possible. After all, multiplying the number of leases to manage is operationally burdensome and time-consuming. Juggling multiple leases might also impact talent experience strategy, by hampering the ability to create consistent and high-quality environments across different spaces.

The good news? Forward-looking landlords are finding fresh ways to provide long-term, medium-term, short-term and on-demand spaces within a single hybrid lease agreement.

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“It is a smart strategic move right now to reduce long-term overhead costs yet build in the flexibility that the occupier needs to ensure a seamless experience for their people,” says Annie Draper, director of Hines workplace services.

How a hybrid lease can work for you

A strategic hybrid lease can help organizations accommodate high- and low-occupancy days alike, while providing a variety of engaging workplace options that complement the company’s brand and culture.

For example, The Square’s location at Corporativo Neuchatel in Mexico City combines hospitality-driven property management and high-quality furnished offices and suites in a cutting-edge urban campus experience. Here, hybrid leasing is built-in, with flexible memberships by the hour, day, month or year, available across a variety of floorplans, all designed to accommodate company sizes ranging from start-ups to larger enterprises.

“Think of the hybrid lease as a master services agreement or another type of corporate contract, where there’s a main agreement and then contractual addenda that are added on an ‘as-needed’ basis,” says Draper.

Evolving leasing strategy for the future of work

Flexible work is changing employee expectations—and corporate real estate strategy at the same time. Occupancy data gives leaseholders the opportunity to reevaluate leasing practices and consider what is working, and what must evolve.

By working with a landlord whose leases are more efficient and better suited to the purpose-driven office of today, business leaders can drive employee experience—while sparking positive business outcomes across the board.