As office vacancies rise, landlords are more willing to rent to flexible-workspace providers. Will the trend last?

As the COVID-19 pandemic drives up vacancy rates in office buildings across Canada, some flexible-workspace providers see an opportunity: negotiate better deals on their existing leases, and sublet prime real estate from big businesses that suddenly have more square footage than they need. However, while commercial real estate lawyers and landlords say there’s been an increase in willingness to work with workshare providers, they also warn the trend may be short lived.

“Anytime there is an immediate month-over-month increase in the number of subleases available in a city, you’re going to see landlords allowing their space to be used on a more temporary basis,” said Simon Crawford, partner at Bay Street law firm Bennett Jones. “But whatever temporary benefit flex-office-space companies might be seeing, I don’t read it as being the beginning of a new trend.… Landlords still prefer major institutional tenants.”

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