A Complete Guide On Flex Space In Commercial Real Estate

Have you heard of the term “flex space” before? Are you aware of the importance of flex space in commercial real estate?

If you are a beginner or an expert real estate investor, flex space is a great way to get into the industrial real estate realm. It is extremely versatile in the way it can be used and with the businesses that these spaces can house.

Here is everything you should know about flex space

What is a Flex Space?

Commercial real estate Austin explains a flex space as a building, which can be single storey, with some sort of combination of warehouse space and office or retail space. These units typically have a warehouse door or a loading dock with a higher ceiling height. It can be around 14 to 16 feet tall. Flex warehouses come in all shapes and sizes. They have such a variable use that they can be used to set up industrial properties, commercial properties, etc. These flex spaces are attractive for an array of business owners that are seeking space. The occupants can include manufacturers, brewers, auto shops, artists, cabinet members and so many more!

Research & Development 

Companies in Austin that are involved in medical research or biopharmaceuticals and also other R & D fields keep looking for commercial office space for rent that accommodates their office and lab needs. These companies are often long-term tenants and commercial properties owner get good rent in returns. Research and Development companies often group themselves. For example, if you can get one company that can occupy some of the space, others too will follow the suit. You should definitely hire a full service commercial real estate firm if you are planning to lease a flex space

Flex spaces are a perfect option for small business owners who want to centralize their operations. They can look out for commercial real estate for rent in Austin to begin their business operations. For example – if you own a furniture-making business, you can use the flex space as a retail shop to sell your goods, but also as a workshop and a storage room for all your materials and equipment. Along with saving on costs, you are also simplifying your transportation logistics. This product also creates an aesthetic boosting synergy, where all the customers can see a glance at how the process of furniture making is done and how their new and unique piece of heirloom furniture was created.

The versatility of flex spaces

Austin commercial real estate is very dynamic. The industry has been booming over the years! That is why; flex spaces can be a great investment for our investors. That is because even if there is a worst-case scenario, you can still fill the vacancy in your flex space because of its wide variety of uses. For example, if the demand for commercial real estate is struggling during its vacancy period, you can market your property as a general office or retail or vice versa.

Leasing a flex space

If you own a business that has an office as well as warehouse needs, then searching for flex space is a wise option. This is because flex spaces are comparatively cheaper than the traditional office spaces in commercial real estate.

That doesn’t mean that your building will be of lesser quality. It just means that you will be paying a lesser rent for the virtually same product. Along with saving money on rent, you will also have options on how you would like to build out your space instead of facing restrictions to a basic layout of a regular office. To ease out the entire process you can opt for real estate asset management services from your commercial real estate Austin. These services generally include Construction Management, Commercial Property Management, Building Maintenance, Project Leasing etc.

For a complete guide on wholesaling commercial real estate, click here. 

Flex Space in Austin

When you combine all the expenses, a flex space will cost you around $15 to $20 per square foot in Austin per year. This depends on the property’s location and its terms and conditions. Unlike traditional office space, tenants that lease a flex space are responsible for paying their electricity bill, HVAC maintenance, and repair cost. Flex space base rentals are generally quoted monthly or yearly.

In Austin, the average base lease rates for a flex space range from $13 to $16 square feet per year. In addition to that, tenants are also responsible for the operational expenses as well as electrical. A triple net lease will cover the building taxes, insurance and common area maintenance costs. In Austin, these costs range from around $0.25 to $0.35 square foot monthly, which is $3.00 to $4.20 square foot yearly.

Advantages of a Flex Space over the traditional office space –

• Lesser monthly and yearly lease cost
• Lesser taxes
• You have control over the cost and the janitorial services
• You do not have to worry about the after-hours HVAC charges since you will be managing and maintaining the units
• There is more usable space since there is no common area
• You have your bathroom
• Own entrance
• You do not have to spend time going up and down the elevators
• You can have an office and a warehouse as well
• You can easily configure and built out an office space according to your choice
• You have the opportunity to put up signage on the building
• You get higher ceiling heights

Disadvantages of a Flex Space –

• Tenants are responsible for every cost for maintenance, repair, and replacement of the HVAC Units if needed. That can be negotiable though.
• You have to clean and maintain the bathroom repairs.
• Parking can become challenging as industrial spaces assume more storage and fewer parking spaces.
• Flex spaces are usually found in the most industrial and commercial areas in Northeast and southeast Austin.
• There can be security issues since most flex spaces are on the ground floor.
• No scenic views and only a parking lot view from the window.
• Fewer expansion options since there will be less space that becomes available.

To conclude –

We hope that this guide was helpful enough and you have all the information you need about Flex Spaces. If you are planning to invest in a flex space or want to lease one, be sure to get in touch with GW Partners, a full-service commercial real estate firm in Austin, Texas.