Office Space vs Flex Space: Which Fits Your Business?

Flex is one of the most confusing words in commercial real estate, and people search for flex office space meaning either of two products. Sort this out first, because everything else depends on it.

• Flex as a building type. A building, often industrial in zoning and construction, that combines office and warehouse or light industrial space under one roof. You lease a unit with both.
• Flex as a contract. Office space on flexible terms: coworking, executive suites, or managed offices with short commitments. The building is often an ordinary office tower. The flexibility is in the agreement.

Keep the two apart: flex space is a building type, and coworking or "flexible workspace" is a separate product. If a listing or a broker uses the word, ask directly: does this have an overhead door, or does it have a short agreement?

If you only need less commitment, you are looking at flexible terms, not a flex building. Our guides to coworking and executive suites cover that decision.

The rest of this guide compares traditional office with the flex building, since that is the choice that changes how your business works day to day. For a basic definition, see our guide on what flex space is.

Austin Tenant Advisors describes flex as light industrial zoned buildings that can be used for both office and warehouse space, usually single-story, with a front office presence and direct vehicle access. It adds that they get called flex office or flex warehouse depending on which use takes up more of the space.

There is no universal definition of how much office makes a building flex. Published figures for the share of office finish vary widely. So look at the actual unit, not the label.

Compared with a traditional office building, these are the differences that tend to matter.

• Access. Flex usually means a door to the outside and vehicles close by. Office usually means a lobby and an elevator, with deliveries through a building dock under the building’s rules.
• Loading. Flex often has a dock, ramp or overhead door. In office, large deliveries can require scheduling and approval.
• Finish and image. Office buildings offer a lobby, views and tenant amenities. Flex usually offers fewer of these. Austin Tenant Advisors notes that limited views are common, and that ground-floor security needs attention from property management.
• Efficiency. Austin Tenant Advisors also points out that traditional office rent is charged on a gross area including shared lobbies and hallways, while net and gross area are nearly identical in flex. Check the measurement in the lease you are actually offered.
• Uses allowed. Flex zoning may allow activities an office building will not, and may restrict others. Do not assume either way.

Start from what happens in the space on a normal day and work back to the building.

• Traditional office tends to fit work done at desks and in meetings: professional services, sales teams, firms where clients visit, and companies that recruit from people who rely on downtown transit.
• Flex tends to fit companies that hold or move physical things alongside their office staff: trades, distributors with light inventory, equipment and service businesses, assembly, light production, testing and showroom uses.
• A split arrangement can fit too. Some companies keep a small office in a client-friendly location and a separate flex unit for operations. You pay for two sets of costs, and you avoid paying office prices for storage.

Location is often the deciding trade-off. Flex tends to sit in business parks near highways, which helps trucks and drivers and may be harder on employees without a car. Map your people before you decide, since the staff commute can matter more than the space itself.

Asking rent is a poor guide across these two products. A lower flex rate may leave more of the bill on your side, and quotes may be written differently, so compare the total annual cost.

1. Confirm how each quote is written. Is it net or gross, and what is the measured area based on?
2. Add the costs that sit outside the rent: operating expenses, taxes, insurance, utilities, cleaning and any maintenance you take on yourself.
3. In flex, ask who maintains the overhead doors, the HVAC serving your unit, and the parking and yard. Responsibilities that a full-service office landlord handles may be yours.
4. Price the build-out. Flex office areas may be dated, and adding offices or upgrading power affects your cost and your timeline. In office, check what the landlord’s allowance covers.
5. Add in restoration at the end of the term, especially if you add equipment, racking or power.
6. Compare over the full term, at your likely size.

• ✓Do zoning and the lease permit what we will actually do there, including any production, chemicals or customer visits?
• ✓What is the clear ceiling height, and is it measured where our equipment or racking will go?
• ✓Is the loading access suited to the vehicles that serve us? Can a truck actually maneuver in the yard?
• ✓Is there enough power, and of the right type, for our equipment?
• ✓Is the office portion the size and quality our staff and visitors need, and who pays to improve it?
• ✓Is there enough parking for staff, visitors and our own vehicles?
• ✓Can the unit be expanded, or subdivided, if our mix of office and operations changes?
• ✓Who handles security, given ground-level access?
• ✓Is the location workable for the people we employ and recruit?

Ceiling height in particular is worth measuring on site instead of taking it from the brochure.

Tenant Advisory Group works on office, clinical and industrial requirements for tenants and buyers, which matters when the honest answer may be either building type or both. We start from how your business operates, screen both kinds of building against that, and put the options on the same cost basis so the decision does not rest on a headline rate.

Bring your attorney in for the use clause and your insurance broker for the coverage, particularly if flex would bring operations you have not run in a leased space before.