In a recent article, we discussed the trend we’re seeing of smaller businesses vacating their flexible office spaces, only to have those spaces backfilled by large organizations.  

That article asked why massive organizations, with their abundant resources and limitless options, would choose flexible workspaces over traditional office leases. 

 The following case study of a real-world scenario we experienced at iQ Offices provides clear-cut answers. 

Flexible Office Vacancy Backfilled by a Multinational Financial Institution 

We recently had a smaller organization leave iQ Offices to relocate their business into a traditional office space.  

This organization was highly engaged with our community. It had a private office with over 150 desks, its staff frequently participated in community events, and its workspace consistently had high employee utilization levels. 

So, what was the catalyst for its departure?  

Ultimately, it boiled down to one simple factor: in the minds of the company’s leadership team, having a traditional office space of their own was “cheaper” than staying at iQ Offices.  

Fast forward a few months, and this company’s private office space at iQ Offices had been occupied by a multinational financial institution that needed a workspace for its local team. 

This made us wonder: what did this multinational organization know that the smaller company was missing? 

We began to unpack the company’s rationale.  

4 Factors That Made Coworking Space Appealing for One of the World’s 100 Biggest Companies  

As a global financial institution operating in dozens of countries, our new client has: 

• The team in place to source, fit out, and set up its own office space 
• Expertise for building top-tier office infrastructure 
• Economies of scale that allow it to purchase furniture and equipment cost-effectively 
• Capital available to open and operate any office space it chooses 
• Expertise that includes highly developed standard operating procedures for running office space in multiple markets  

Yet the organization still chose our coworking space for its Toronto team rather than taking on a traditional lease.  

Their reasons for joining iQ Offices boiled down to four factors.  

1. Efficient Use of Resources  

There is no doubt that our new client has abundant in-house resources, including, but not limited to, its Head of Corporate Real Estate and centralized procurement and construction teams. 

However, the organization understood that these people and resources could be better utilized elsewhere and opted not to use them to build a local office for its Toronto team. 

2. Lack of Complexity  

There is real value in a lack of complexity when it comes to procuring workspace.  

Rather than allocating the time and resources required to navigate months' worth of meetings with landlords and legal counsel, they were able to sign a quick and simple license agreement with iQ Offices, all under one point of contact.  

3. Turnkey Space and Cost Savings 

As an extension of the previous point, it’s important to understand that signing the lease is only the first step in opening a traditional office space.  

From there, the real work begins, including: 

• Design 
• Construction  
• Procurement 
• Technology and infrastructure setup 
• Hiring and staffing 
• Ongoing maintenance 

All of these elements are costly, time-consuming and take focus away from their core business.  

On the contrary, these things are all handled by the flexible office space operator within the terms of your agreement. With a private office or HQ by iQ, you can sign your agreement and be working in your new fully serviced office in a matter of days. 

Our new multinational client understood the value of this convenience. It allowed the organization to save time, cost, and hassle and reallocate these efforts to higher-value endeavours.  

4. Flexibility, Operational Agility, and Reduced Balance Sheet Liabilities  

In the wake of the pandemic and the rise of remote work, many large organizations have realized that their commercial real estate portfolios are now filled with expensive office space holdings that are not producing any return. 

Worse yet, International Financial Reporting Standards (IFRS) stipulate that office leases longer than one year must be shown as a liability on your balance sheet.  

This has caused many of these organizations--our new client included--to re-evaluate their approach to office space. 

As a result, flexible office space has emerged as a viable way to enlist top-tier workspaces without long-term commitments or balance sheet liabilities.  

These short terms also allow these organizations to maintain better operational agility, providing the ability to scale in place or to forego their workspace more easily and cost-effectively should their needs change.  

The Lesson That Every Business Can Learn from This Case Study  

This trend is objectively counterintuitive. Global organizations are making moves that you would expect smaller companies to make, reducing hassle and costs while maintaining agility so they can operate their businesses in the most efficient way possible.  

So, what lesson can be gleaned from this trend for both large and small businesses alike?  

Follow the smart money. Even with abundant resources and manpower, some of the world’s largest organizations are choosing coworking space, and their rationale applies to businesses of all sizes.   

At iQ Offices, our core business is providing unparalleled flexible workspaces, and we’ve spent more than a decade perfecting our craft. We invite you to experience it for yourself—book a tour of your local iQ Offices location today.