What is Flex Space in Commercial Real Estate? A Complete Guide

What is flex space in commercial real estate? As flex space increases in popularity, more small businesses, startups, mobile workforces, and service-oriented companies are wondering about the affordability and flexibility of this option. In this complete guide to flex space, we’ll explore what flex space is, some of its most common qualities, what type of businesses use flex space, advantages and disadvantages, and tips for leasing your next flex property.​

What is Flex Space in Commercial Real Estate?

Flex space is a type of commercial real estate that generally combines warehouse and office/retail space, providing a flexible and adaptable option for tenants. Flex buildings typically have shorter lease terms than traditional office buildings, smaller warehouse sections than traditional warehouses, and are usually found in prime locations that offer easy access to a wide customer base.

More and more businesses are turning to flex space buildings for their affordability, adaptability, and convenience. Small businesses, startups, mobile workforces, service-oriented businesses, and smaller companies looking for shorter leases often tend to gravitate toward the flex property option.

And for investors, flex properties offer the benefit of appealing to a wide range of users. Both their high demand and versatility make flex assets a popular investment option.

Common Qualities of Flex Space

1. Single-story layouts

Most commercial flex space properties feature a single-story building, which provides easy access and an adaptable layout for different users. One downside of having the entire building on one ground floor is that there are typically fewer windows than other commercial office spaces with many stories and windows on all sides.

On the other hand, flexible office spaces not only support a variety of users, but these types of properties also offer easy access to the parking lot without having to navigate elevators or travel farther distances to the attached warehouses. Flex space users typically also enjoy convenient restroom access, with self-contained restrooms within the space.

2. Loading docks

Flex buildings typically have at least one loading dock or warehouse door that makes the warehouse section usable for shipping and receiving facilities. Usually, this tends to be a roll up door instead of a dock door.

3. Higher ceiling heights

High ceilings are another common feature of flex warehouse space. This feature allows more storage space for different types of companies – whether a warehouse, manufacturer, or distribution center.

4. Smaller parking lots

Unlike traditional industrial properties or warehouse spaces, flex spaces typically have smaller parking lots, since they don’t need to accommodate large trucks and trailers in the same way that distribution buildings do. Most of the time, flex parking lots are simply hosting employees and smaller trucks, such as FedEx and UPS vehicles.

5. Customer-facing front side

Unlike typical warehouse industrial space, an industrial flex building usually has a customer-facing front side. This allows the business to welcome customers and clients in a professional manner. The office segment, usually located on the front side of the building, also makes it easy for administrators to greet guests when necessary.

6. Significant office portion

In most flexible spaces, the office areas take up at least 50% of the space. Flex office space is sometimes leased by only one company, but often, it’s shared by many companies. This coworking option for office work cuts down on costs for users compared to traditional office space.

The typical layout of these offices features a more open floor plan than traditional office buildings, which usually have separate rooms or cubicles. This allows for greater flexibility for a variety of users as well as for the changing needs of businesses.

7. Common areas

Flex offices typically have common areas where employees can network, collaborate, and experience a sense of community within the workplace. While this can lead to better brainstorming sessions, greater creativity within the company, and improved morale through stronger relationships, it can also lead to less privacy, which can be a downside for some tenants and employee personality types.

8. Convenient access

Flex properties are usually found in key locations such as near main roads, highways and interstates, urban areas, and other transportation hubs. Since these spaces are often used by service-oriented businesses, having an accessible location is vital for being able to quickly travel to a wide customer base, as well as to suppliers and partners.

9. Scalability

Flex spaces offer businesses the opportunity to grow by leasing out smaller or larger portions of the space as needed. For business owners, the option of being able to scale the business without having to find a whole new property can be an invaluable feature of flex space.

10. Shorter leases

Shorter lease options offer greater viability to small businesses and startups who aren’t sure how much or how quickly business operations will change. Being able to adapt to market conditions due to the option for shorter lease terms is a major perk of flex space for businesses.

Some property owners even offer month-to-month lease options. Compared to long-term leases, this option allows businesses to be able to easily pivot and adapt for future opportunities.

What Types of Businesses Use Flex Space?

Flex space is often used by service-oriented businesses, startups, mobile workforces, and other small businesses looking for an affordable and flexible lease option.

Common flex space users include:

• Painters
• General contractors
• Roofers
• Cleaning companies
• Pest control companies
• Tech companies
• E-commerce companies
• Research and development (R&D)
• Fitness centers
• Retail and logistics
• Mobile workforces

Benefits of Flex Space

• Cost Effective. Most flex properties lease for a lower cost than traditional office buildings. In the metro Charlotte area, we’ve found that flex is actually about 50% of the cost of traditional office space. This makes flex properties a great option for a variety of industries, offering effective solutions that are especially helpful for startups and small businesses.
• The layout of flex buildings is generally very adaptable, providing options for different types of office and warehouse needs. Usually, flex buildings feature a more open office work environment and a warehouse with high ceiling heights and at least one dock door. The versatility of these spaces allows companies to customize the space to fit their specific needs.
• Shorter lease terms. Flex property owners typically offer shorter lease options, with some even being open to month-to-month agreements. This flexibility is ideal for newer businesses or anyone who may need to change direction quickly.

Disadvantages of Flex Space

• Lower-quality offices. Flex offices typically have fewer windows than taller office buildings, which can be difficult for employees who work full time in the office segment. On the other hand, many flex office workers only work part time or travel to different parts of the building during the work day. Flex offices also have less privacy and more common areas than traditional office spaces, which can be distracting for workers.
• Zoning restrictions. It’s important to note local zoning regulations before signing a lease for a flex property. Some municipalities have restrictions on the type of manufacturing or retail operations that can take place in different zoning.
• Higher maintenance costs. Although the overall cost of flex space is typically quite low compared to other types of properties, maintenance costs can be higher for these buildings. This is due to the nature of having both office and warehouse space and the need to keep all features up to date in both portions of the building.

Tips for Leasing Flex Space

1. Check zoning

Zoning restrictions in different municipalities mean that some types of businesses will not be allowed to operate in certain zones. Before closing on a flex space, make sure that you’ve checked the zoning and that it’s adequate for your business.

2. Consider your service area

Flex users are often traveling to customers and clients. Fortunately, most flex spaces are located in higher-traffic areas near interstates and other transportation hubs. Consider not only your service or trade area, but also the accessibility of your new property to your employees.

Convenient flex locations allow businesses to operate swiftly and save time and money by reaching clients quickly and efficiently.

Click here to learn more about the availability of flex space in various Charlotte neighborhoods and surrounding cities.

3. Ask about expansion options

A major benefit of many flex spaces is the ability to expand and adapt with changing business needs. If you’re only going to be leasing part of the building, be sure to ask about possible future expansion options to different portions of the building.

4. Understand the lease terms

Understanding options for lease length as well as the specific type of lease and lease terms is key for a positive leasing experience. Take the time to understand all of the terms of your lease agreement, and consider working with an experienced tenant representative to help you navigate the gritty details and avoid future frustration.

5. Amenities and maintenance

Lastly, consider the amenities in both the office and warehouse portion to make sure they adequately fit your needs. Will the office be conducive to the work styles in the building? Are the warehouse’s power supply, ceiling height, and loading capabilities all compatible with the type of manufacturing or storage that will take place?

In addition, keep in mind that you will likely be responsible for keeping up with maintenance on all features, so make sure the building doesn’t have significantly more space or features than you need.

Find Your Next Flex Space Property with Regent CRE

As experts in the Charlotte Metro commercial real estate market, our team at Regent Commercial Real Estate has successfully closed over 500 flex space transactions. From a custom list of ideal potential properties to closing support through the last step, we’re here to make your experience seamless and successful. More than simply finding a property, our goal is to help you take the next step to a thriving future for your business.

When you work with Regent CRE, you can expect top-notch negotiation skills, more time to focus on your business, and the best value for your money.

​Ready to get started? Browse flex options around Charlotte, or contact us today.