Flex space demand signal

Flex office-warehouse buildings are drawing the kind of tenants landlords usually prize: operators that need both front-office space and working warehouse space, and often stay for years. (jll.com) In commercial real estate, “flex” usually means a smaller industrial building that mixes office, showroom or service space with storage, loading and light production under one roof. Recent listings from CBRE and LoopNet market these buildings to contractors, distributors, service businesses and light industrial users rather than pure office tenants. (cbre.com) (loopnet.com) That tenant mix lines up with the broader industrial market in 2025 and early 2026. JLL said U.S. tenants leased 533.2 million square feet of industrial space in 2025, up 8.4% year over year, while Cushman & Wakefield said demand strengthened in the second half of 2025 even with tariff uncertainty and a cooler labor market. (jll.com) (cushmanwakefield.com) Broker research points to logistics, distribution and manufacturing users as the active pools of demand. JLL said demand from third-party logistics, logistics and distribution companies rose 13% year over year in its 2025 U.S. Industrial Tenant Demand Study, while CBRE’s 2025 outlook said occupiers were shifting back to longer-term warehouse efficiency and supply-chain resilience. (jll.com) (cbre.com) That helps explain why flex product can hold up differently from ordinary office space. A plumbing supplier, food distributor or light fabricator uses the office for sales and dispatch, but the lease is anchored by physical operations that are harder to move online or cut overnight. (cbre.com) (commercialsearch.com) The wider industrial market is not booming in every segment. NAIOP projected 156.4 million square feet of net absorption for 2025 and 224.9 million square feet for 2026, but it also said vacancy had risen as deliveries outpaced demand after the pandemic-era surge. (naiop.org) CBRE reported U.S. industrial leasing activity rose 12% in 2025, but said the increase was driven partly by mega big-box deals and lease renewals, not a broad return to free-spending expansion. JLL likewise said overall market demand in its tenant study was down 10.9% year over year as occupiers took longer to make decisions. (cbre.com) (jll.com) For owners of flex buildings, that points to a narrower marketing strategy than “small business space” alone. The clearest targets are multi-service distributors, building-supply firms, repair and field-service operators, and light-processing users that need a loading door, a few offices and a location close to customers. (cbre.com) (loopnet.com) The signal is less about a new property fad than about who still signs for real operations. In a market where many occupiers are delaying decisions, the users that combine office, warehouse and light production in one box remain among the clearest sources of durable demand. (jll.com) (cushmanwakefield.com)