Why Investors Are Turning to Flex Space

What Is Small Bay Flex Space?

Flex space is a versatile, multi-use hybrid real estate asset that blends different functions, typically combining office, warehousing, and light industrial or retail space all under one roof. These small bay units are designed to accommodate various uses, such as a combination of office, industrial, and retail functions. These spaces can be quickly reconfigured to meet evolving business needs for administrative, operational, or customer-facing activities, making them ideal for small businesses and those requiring both professional and operational environments.

In today’s commercial real estate landscape, adaptability is everything. Businesses are rethinking their footprints, e-commerce is driving demand for smaller distribution hubs, and entrepreneurs need spaces that can grow with them. Flex space has quickly risen as a go-to answer, reshaping the commercial real estate market with its emphasis on versatility and efficiency.

Market Drivers Behind Flex Space Growth

Flex space isn’t just a trend; it’s a growing asset class fueled by powerful market forces:

• The Rise of Hybrid Work Models
  The hybrid work models, where employees split their time between home and the office, has reshaped corporate real estate needs, with businesses moving away from large, centralized office spaces in favor of smaller, more flexible solutions.
• Demand for Versatility
  Startups, tradespeople, contractors, logistics companies, and storage users all value the ability to customize and scale. Flex units provide exactly that, serving as workshops, offices, showrooms, or storage depending on the need.
• Economic Resilience
  Unlike single-use assets, flex properties attract a diverse tenant base, which helps them remain stable across the changes in the economic cycles. This resilience makes them especially appealing to investors.
• E-Commerce & Last-Mile Delivery
  As online shopping accelerates, the need for smaller, strategically located distribution spaces grows. Flex units often serve as last-mile hubs, bridging the gap between large warehouses and end consumers.
• Regional Trends
  The Mountain West, Southwest, and suburban corridors nationwide are seeing a surge in flex space development. Population growth, favorable business climates, and limited traditional industrial supply make these regions hotspots for investment.

According to a report, “Five Years After Covid,” demand for flexible workspaces across the U.S. and Canada is now 19% higher than it was pre-pandemic. And while supply has grown by 8% over the same period, it is not keeping pace, creating new opportunities for developers and investors to deliver where the market needs them most.

Keys to Successful Flex Space Development

Building successful flex projects requires careful planning and foresight. Developers should focus on:

• Site Selection
  Access to major roads and transportation routes; compliance with local zoning laws and environmental regulations to avoid legal complications; infrastructure – prioritizing essential utilities and services; and proximity to target users are critical.
• Optimal Unit Mix
  Offering a range of unit sizes with the right balance of dock-high and grade-level doors, as well as a mix of office and storage space, ensures broader tenant appeal.
• Structural Engineering for Flexibility
  Clear spans, mezzanine options, and provisions for future expansion allow owners to adapt buildings as tenant needs evolve.
• Cost Optimization
  Smart steel design, phasing strategies, and a focus on long-term durability keep projects financially sound while maximizing investor returns.

Why Working with Experts Matters

Flex space is no longer a niche product. It’s one of the fastest-growing categories in commercial real estate. Its adaptability, resilience, and ability to support modern business needs make it a compelling choice for both developers and investors.

Industry analysts predict that flex spaces could comprise 30% or more of the total commercial real estate market by 2030, up from a niche segment just a decade ago. What began as a solution favored by startups, small businesses, and e-commerce entrepreneurs is now being embraced by larger corporations and logistics providers seeking adaptable real estate solutions (Loan Analytics, 2025).

At Forge Building Company, we know that adaptability is the cornerstone of today’s commercial real estate development. With decades of experience in steel building design, we bring:

• Expertise in Adaptable Structures – Designs engineered for multi-use, multi-tenant flexibility.
• Value-Engineering Insights – Smart solutions that save time and money without compromising quality.
• A Proven Track Record – From self storage to industrial and flex projects (or a combination of building types), Forge has delivered successful builds across the country.

When it comes to flex space, choosing the right development partner is key. Forge Building Company provides the foundation, strategy, and expertise to ensure your investment is built for the future and turns your vision into reality. Let’s get started today.

Contributing Editor: Melissa Anderson, Forge Building Company