"The way people work is changing." It's a tune we've been hearing for the last decade, ever since remote work had become easily accessible to some percentage of the workforce. People working from locations other than their offices had already been a growing trend. Then the pandemic hit.
Suddenly, everything did change. And it happened almost overnight.
Some people didn't want to go into their offices -- and their offices didn't want them there, either. This move likely saved a lot of office workers' lives, especially in the early days of the pandemic. But, as those workers got more and more used to Zoom calls and having lunch with their spouses every day, they started to see the real potential of remote work.
Employers did, too. Perks that were once funded by the office no longer needed to be paid for, utility bills were lower due to the reduced use of office spaces, and some companies found they could shrink their footprint to save even more money. Everybody won (kind of).
Office space investors got beaten up pretty badly during the pandemic's darkest days. But a reimagining of the office could very well create new demand in a world full of workers who aren't ready or willing to give up their independence again.
Enter the lomad
You may have heard of "digital nomads," or remote workers who are never physically present in the office and may not even be located in the same state or country as their coworkers. They may work out of different locations, including home offices, cafes, hotels, restaurants, or other public spaces. They may even rotate where they work because, frankly, they can.
A “lomad” is something similar. Short for "local nomad," lomads are the friendly neighborhood version of a digital nomad. They live near their offices; they just don't happen to be in them very often. The difference between lomads and digital nomads, though, is that lomads do make an appearance at work sometimes. That may be to use a conference room with a client, attend a meeting, or simply change their scenery a bit.
It's that scenery-changing that's making the lomad trend really appealing for workers who have been sent home from the office for pandemic-related (and other) reasons. As lomads, they can park it anywhere, as long as the space they're in has a good Wi-Fi connection and a place to plug in a laptop.
And employers are taking note. In a bid to save money on spaces that are being underutilized, companies are starting to turn to flexible co-working spaces. This lets them offer their resident lomads more working options without a bigger office budget.
The GSA leads the way to flexible offices
Many companies implemented hybrid work plans for employees on a temporary basis that has slowly become more permanent. The U.S, General Service Administration (GSA), for example, announced on Aug. 18, 2021, that it had awarded five flexible-workspace companies with contracts to provide flex space to government employees. Although it had been on the hunt for providers since January 2020, the timing absolutely could not have been better.
These contracts, each for a one-year period, with four additional one-year renewals (a total of five years for each company), are valued at $50 million. They were awarded to EXPANSIVE, Deskpass, The Yard, WeWork, and LiquidSpace. Currently, the GSA has a 700 million-square-foot office portfolio that serves over 2 million employees across the nation.
It won't take long for this government experiment to catch the attention of other companies that want to offer more flexible options for their lomads (and save money!). After all, the move toward flexible work has been building, but like e-commerce, it was catapulted years into the future by the ongoing pandemic.
The Millionacres bottom line
Now is absolutely the time to get in on flexible spaces; I have zero doubt. With the GSA all-in on these spaces for its workforce, a lot of government partners and other large corporations will no doubt follow suit. This may spell a dip for office investors, however, if a sizable percentage of HQ square footage is traded for WeWork desks.
Many companies continue to look at remote work simultaneously as a cost-saving measure (since the resources each employee consumes related to their workspace becomes minimal) and a huge headache (because there's a strange myth going around that remote workers aren't actually working). Flexible spaces offer a bit of a compromise for workers who want to be close to home, for example, but whose office wants them to be in an official workspace to encourage productivity.
It may be a compromise that everybody can enjoy.