Workers’ desire for flexibility forcing ‘great lease resignation’ in commercial office space


There are some myths about working from home and the trend toward hybrid workplaces that…

There are some myths about working from home and the trend toward hybrid workplaces that Wayne Berger wants to challenge: Workers don’t want to work from home all the time, companies don’t want to abandon Canada’s downtowns and the move away from long-term office leases started well before the COVID-19 pandemic. 

“What people are really looking for is choice and options in where they need to work each day,” said Berger. “Their teams are saying ‘We don’t need to be downtown every day. We want to get together and be purposeful so let’s get together when it makes sense. So that changes the dynamics of when you need space.'” 

Berger is the CEO of International Working Group (IWG), a company with 3,500 flexible workspace locations around the world. The company plans to add 13 new flexible workspace locations in Canadian cities including Surrey, B.C., Regina and Mississauga, Ont. 

In London., Ont., a city with a downtown vacancy rate now above 25 per cent, IWG plans to open a second location in the spring. The company has a hybrid office space under the Regus brand in an office building near the corner of Wellington and Dundas Streets. 

Berger said they plan to add another location under the HQ brand in the new year. Its location will be just outside the downtown core on Dundas near Colborne Street. 

Berger said office spaces are available for rental durations as short as a single day and demand is growing, despite the trend toward working from home.

His research suggests that only about one in 10 workers want to work at home all the time. 

Flexibility for work locations

A London city staff report points to a concentration of ownership in the downtown core with just under 60 per cent of properties under one owner.
The CEO of hybrid office space operator IWG said the move away from long-term leases for office space is driven by a desire for workplace flexibility from companies and their employees. (Andrew Lupton/CBC)

What he says is driving the demand for hybrid offices is a need for companies to gain more flexibility in where they work and a response to workers’ desire for the same. 

“A lot of businesses and their workers want to be downtown, they just want to be downtown on their terms,” he said. “They don’t want to be tied into a long-term lease that’s very expensive and completely inflexible.”

Berger believes many businesses, not just small tech firms and startups, are done with expensive and inflexible long-term leases in large buildings. They want workspaces that are cheaper of course, but also scalable and located closer to where their employees live. 

“I think people want separation between home and work but also be able to access the workspace in a convenient way,” he said. 

The office spaces IWG offers are designed to be inviting and professional with a mix of meeting rooms, private spaces and support staff to greet clients and help with logistics. IWG offers four different brands with different price points. It’s a spread in product offerings Berger likens to the difference between a Ritz-Carlton versus a City Express, two very different hotel brands operated by Marriott. 

‘We can bring vibrancy’

Berger said the move toward hybrid working will play a role in reviving Canada’s downtowns. 

“We can become an anchor tenant in otherwise empty buildings,” he said. “We can bring vibrancy.” 

Innovation Works, which is owned by the Pillar Nonprofit Network, operates a co-working space from offices on King Street near Clarence Street. 

Pillar’s Maria Luisa Contursi said private bookings are at capacity, and they get calls to book flex desk spaces almost daily. 

“We know anecdotally that people are tired of working from home and want to be in a work environment that is flexible, and allows them to gauge the level of engagement they need for them to be connected to purpose,” she said. 

Pillar itself offers its employees a 60/40 split between working from the office and working from home. 

“This is in line with our commitments to upholding decent work principles which offer better pathways to psychological well-being at work,” she said.

Berger doesn’t see the trend away from permanent office space slowing down. He calls what’s happening in commercial real estate “the great lease resignation.”

“It’s not just small companies,” he said. “About 85 per cent of the Fortune 500 companies are our clients. They see this as the future.” 


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