Tashi Dorjee: How flexible spaces are adapting to a new normal

In our video Q&A series, The Check-in, we promise to keep it real with real people and real stories that explore how different industries around the world are being impacted by the “new normal” we’re all living in. 

In this edition I sat down with Tashi Dorjee, Senior Director and Flexible Space Solution Lead at global commercial real estate (CRE) services company JLL, to talk about how the flexible space industry is adapting and accelerating amidst this pandemic. 

Welcome, Tashi. Could you start us off by telling us about yourself and what led you to your current role?

Tashi Dorjee: Thank you for having me. I’ll give you a really quick snapshot of myself.

So, I currently work within the flexible space market and I have for some time. I started my own flexible space business about four or five years ago where we specifically turned hotel spaces and restaurant spaces into a network of flexible spaces.

That took me on my journey toward my current role, I’m in charge of Flexible Space Solutions over at JLL for ANZ. It’s been super exciting, and I can share more about that later.

Prior to taking on this role, what has always led me towards the reuse of space and flexible spaces is my fascination with sustainability. Before physically getting involved in the space, if you will, I was working on a lot of carbon conservation projects.

That includes rainforest protection - we’re still working to protect about a million hectares of rainforest across Indonesia and Malaysia and surrounding areas. I’ve always been fascinated by how we can become more sustainable on a day-to-day basis.

Fantastic. Now, you’ve seen a lot of change over the course of your career. What’s been the biggest pivot for you in response to COVID-19? 

Tashi: Yeah, that’s a really interesting question because we get to see the changes from many sides of the market: From an investor’s perspective to the landlord’s, occupier’s, and tenant’s, as well as from the commercial real estate services perspective at our company.

From a personal perspective, what I've been seeing is that, in response to COVID-19, there's a big question mark or uncertainty around what things will look like post-pandemic - once we are on the other side of this. 

A lot of landlords also see flex space as an opportunity to retain their tenants. They (tenants) get access not only to many floors in their building, but also to beautiful flexible spaces with food and beverage offerings and a lounge. (click to tweet)

We’re really seeing how this shift toward flexible spaces is becoming increasingly important. That’s not just because of those original soft drivers that have always been there, but also because flexible spaces help fulfill the needs of corporate tenants.

They want a bit more flexibility, and they want to lower risks by decreasing the amount of space they would take on through traditional leases. 

Can you tell us a little more about what work-from-home looks like for CRE?

Tashi: I think this whole work-from-home thing that’s going on has been a real litmus test for a lot of employees. They’re starting to see that they can still be efficient and productive while working remotely. That’s going to cause a shift in thinking - companies will realize they don’t need all of this fixed space. They can get employees to work from home part of the time, and work from flex spaces part of the time. 

I think the biggest thing we’ve been seeing for a while now is this movement towards flexibility and how stakeholders like landlords will accommodate for that.

From a hygiene perspective, it must be quite challenging for offices to figure out how they’re going to have a less dense workplace or more space for each person. As a flex space operator and strategist, how do you see that coming into place with the return to work? 

Tashi: This works out well for flexible space operators. I will add that there’s a growing savviness among invested landlords who want to do it themselves. That is, rather than bringing in a third-party operator to do it all for them, they may lease space and run a flex space business themselves. 

We’re seeing this growing need and trend—landlords are branding their business as a flex space and then bringing in an operator to run it for a fee. It’s almost like a management agreement, which is very similar to the Hilton hotels of the world today. (click to tweet)

Once upon a time, the Hilton company actually owned all of the hotels, but now they don’t. Those assets and buildings are actually owned by property funds or other owners or investors, and Hilton is just the brand. They run it as a Hilton hotel and get paid a fee.

When you're starting out in the flex space industry, all those of things kind of get packaged up and taken care of by the flex space operator. 

If you have over two floors, for example, and a number of companies working from these floors, as a company owner, you're going to have to figure out how to de-densify space, especially within the floor plan.

All of this is being taken care of by flexible spaces, whether it be through the community manager or by incorporating these plans into the floor plan from day one. There's a lot of research and resources being put into that right now. 

What are the short term actions coming from the pandemic?  

Tashi: One of the actions we'll see in the short-term is the de-densification of desks within spaces. That doesn't mean you're going to see one desk with nothing else around it, but there's definitely going to be heightened awareness around being more spatially aware of those around you to abide by social distancing rules.

This change will happen not just to existing floor plans, but also in floor plans of the future as we start building and designing new spaces with these considerations in mind.

Here’s where technology comes in - everything from sensory imagery to sensors, contactless entries into buildings, and the ability to avoid pressing elevator buttons or touch door handles.

I think one of the key advantages from the landlord’s perspective is the fact that if tenants take a couple of offices in a flexible space, they also get other areas like lounges. That comes with cleaning services to make sure all is taken care of from a hygiene perspective.

Then of course there are other advantages. If you take a commercial floor, for example, traditionally ventilation systems are designed for that one open floor plan. If you look at a flex space - specifically the more premium ones tailored for landlords - you’ll get your own HVAC system for each of your private offices.

For those that actually come to the office a few times a week, access to communal areas for meetings or projects also becomes a very important asset differentiator. If people commute in for a meeting, they’ll also want some sort of bespoke offering paired with that. Then, obviously, the design of these floors has changed to be more post-COVID-19 friendly. 

There will certainly be an enormous change moving forward, but I do think that trend that a lot of us are already seeing is only being accelerated by COVID-19. Do you agree?

Tashi: Yes. From my perspective, many of the projects I was working on earlier in the year have been escalated. Some have slowed down, naturally, because there are some strategic decisions that still need to be made by certain portfolios.

But overall, that growing awareness of flexible space that’s always been around is growing even faster. That’s not just because of the benefits I’ve mentioned, but also because there’s a growing demand for flexibility from occupiers and tenants who don’t want to be locked in 5- to 10-year leases.

Their short-term strategy could be to de-densify office space, sending employees that need an office to a flex space rather than completely redesigning your own office.

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