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Tune in to any news feed and you are likely to hear a steady drumbeat of instability. Ukraine. Venezuela. Taiwan. Iran. Greenland. Whether you track geopolitics closely or not, you can feel the world getting less predictable.
What’s underappreciated is that business is not immune to these same conditions.
Yet for decades, corporate real estate was built on that very assumption: predictability.
Headcount would grow steadily.
Employees would commute most days.
Work would happen primarily in offices.
And long-term leases would roughly match long-term need.
None of these underlying assumptions hold today.
Yet much of today’s debate about work and workplace still assumes we can restore them. If only leaders were firmer. If only employees complied. If only we could rewind to 2019.
We can’t.
The question facing enterprise leaders today isn’t where people should work. It’s how to operate a workplace portfolio in a world where uncertainty is rising and predictability is fading.
The Portfolio Was Priced for Stability
Office portfolios were designed for a stable labor market. Long leases made sense when utilization was high and consistent. Capital investment made sense when work patterns barely changed.
But labor has become more volatile.
Hybrid work preferences were tested at global scale during the pandemic and broadly affirmed afterward. While many CEOs have grown tired of the change management this requires and have reached for full-time return-to-office mandates, employee expectations haven’t snapped back in the same way. The result is policy whiplash. Mandates. Exceptions. Enforcement. Attrition.
At the same time, distributed hiring has proven to be a real competitive advantage. Companies that hire the best talent regardless of location move faster and scale more efficiently. But this breaks the historical link between where employees live and where offices are located.
And now there’s AI.
We’re only a few years into a shift that’s already changing how work gets done. No one yet knows its full impact on headcount, skills, or team structure. But one thing is clear. Forecast error is increasing, not decreasing.
Together, these forces create demand variability. How many people need space, where they need it, and how often. Static, capital-intensive office portfolios were never designed for this.
Flexibility Isn’t the Risk. Rigidity Is.
Most corporate real estate portfolios were built on a bet.
They were a bet that headcount would be stable, that work would happen in offices most days, and that demand could be projected years in advance. Long leases, large footprints, and heavy capital investment all made sense if those assumptions held.
They don’t.
In today’s environment, that bet is increasingly a losing one. Underutilized offices become stranded assets. Early renewals lock in outdated assumptions. Defaulting to familiar landlords feels safe, but quietly compounds exposure.
Most portfolios today are overleveraged to a version of work that no longer exists.
This is where flexible office is often misunderstood.
Flexibility isn’t an indulgence. It’s a hedge.
It replaces fixed commitments with optionality. It limits downside when assumptions are wrong. It allows portfolios to adjust as labor demand, team structure, and work patterns change, without forcing companies to pay for certainty they no longer have.
That doesn’t mean abandoning discipline. Quite the opposite.
When governed properly, flexibility doesn’t increase risk. It reduces it. It turns real estate from a long-term bet on predictability into a portfolio that can respond to uncertainty. And unlike most hedges, it comes with upside. Better employee experience. Broader talent reach. Faster organizational adaptability.
The real risk today isn’t flexibility.
It’s continuing to operate a static portfolio as if the world were still predictable.
The Hybrid Dividend Still Matters
When companies get hybrid right, they unlock what we call the Hybrid Dividend.
There is a real estate cost dividend. For many companies, it is not incremental. It is a step-change. The office is often the second-largest expense on the P&L after payroll, and most portfolios are still sized for a world of higher utilization than reality delivers today. When companies right-size excess footprint and replace it with flexible capacity, the savings can be dramatic. Not two or three percent. In many cases, they are measured in tens of percent, and they compound year after year.
There is also a people dividend. Give employees real choice and align space with the work being done. Focus. Collaboration. Team gathering. Engagement and retention improve.
These dividends reinforce each other.
Cost reduction without alternatives backfires. Flexibility without governance unnerves finance. The Hybrid Dividend only shows up when choice and control move together.
From Planning Offices to Operating Portfolios
What comes next for corporate real estate isn’t another round of return-to-office debates. It’s a shift in operating model.
The companies that adapt best will stop treating workplace as a static footprint to be planned every few years. They will operate it as a dynamic system, continuously.
That means managing a network of spaces, not just a headquarters.
Using actual usage data, not assumptions, as market truth.
Turning renewals into competitive moments, not defaults.
Governing flexibility with policy, permissions, and reporting so finance can trust it.
In this model, fragmentation stops being a weakness. It becomes leverage.
A fragmented ecosystem of flexible office providers, when connected through a common system, creates something more powerful than monopoly scale. Allied scale. Enterprises gain real choice without being trapped in a single operator’s footprint. Competition returns to the market.
The CEO and CFO Question
For CFOs, the logic is straightforward. Uncertainty rewards optionality. Over-commitment is expensive. Flexibility, when governed, is a hedge.
For CEOs, the implication is broader. Workplace is no longer just a facilities issue. It’s a labor strategy, a financial strategy, and a resilience strategy.
In a world where headcount, skills, and technology are all in flux, the ability to reconfigure how and where work happens matters.
The question isn’t whether people should come back to the office.
It’s whether your workplace portfolio is built for the world you’re actually operating in, or for the one you wish would return.
