Archive for the ‘Office Space Experience Series’ Category
Working Independently, Together = Coworking
Do you work independently or freelance, but occasionally reminisce about the cubicle neighbors you left behind, even though they sometimes annoyed the hell out of you? Does freelancing get a little lonely, or do you wish you had someone to bounce ideas off of and collaborate with? Then Coworking might be for you. Brad Neuberg, a computer programmer in San Francisco, started the Coworking movement in 2005 as a middle of the road solution between working for a soul crushing corporation and working independently. Instead of clicking away at the keyboard on the couch in your undies, Coworking spaces bring likeminded freelancers and independent contractors together into communal offices.
Coworking provides the camaraderie, structure and social interaction usually missing from the freelance lifestyle. The offices usually implement an open floor plan with desks and a few cubicles. Most usually include a communal meeting room and some kind of kitchen area. The prices range from $10 per day to around $400 or $500 per month for your own personal desk space, with many options in between.
It’s a great solution for people who don’t want to commit to an extended office lease since most Coworking spaces operate on a month to month agreement. If you are a freelancer, contractor or consultant, a Coworking space offers an alternative to the sometimes stodgy office suites.
The movement has been catching on, fueled by an increase in freelancers, a prevalence of vacant office space and the grassroots nature of the movement. The whole movement is very connected and the Coworking wiki and blog help foster development of new Coworking spaces. Although the movement began in San Francisco, Coworking offices continue to spring up around the world and exist in most large cities. The basic model is very altruistic and flexible with some spaces allowing people to hang out for a few days before making a commitment. The main idea is to build a tight knit community, where people work and interact, through the shared space.
View Coworking in a larger map
Office Space Experience Series: Office and Executive Suites
Executive Office Suite Space, 795 Folsom St., San Francisco,CA Office suites, also known as executive suites, provide a very unique office space experience. Sometimes they are classified as shared office space or a sublease office, but really aren’t either of those. Office suites are set up and managed by a company whose sole business is to lease and mange that space. They are a great solution if your business needs a flexible lease term since office suites provide hourly, month to month, or longer term offices. It’s also great if you want a smaller office in a prestigious location, with office suite locations in swanky zip codes around the world. Suites include many built in amenities out of the box, such as conference rooms, phone, internet, answering services and printing, but these are usually accompanied by additional fees for their use. Office suites are very flexible, but that flexibility usually doesn’t come cheap. You will usually pay a slight premium for your office suite space over a more informal shared space. Usually that premium is worth the flexibility and the professional image provided to for your business. If you are a consultant or salesperson, or travel extensively and need a place to work on the road, office suites are a great solution since they offer memberships that provide access to work spaces in many different cities. However, this is usually limited to the bigger providers, such as Regus. Although business suites are great for smaller companies, keep in mind that they do not scale very well when your business starts growing. Once you begin to occupy more executive suite space, you will tend to get better economies of scale from a traditionally leased space. Plus, if you want flexibility with the interior of your office space then office and executive suites might not be right for you since most of the interior is pre-packaged decor and furniture.
Example Office Suite Space, San Francisco
Who is office or executive suite space for:
Pros and Cons of Office/Executive Suite Space
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Office Space Experience Series: Sublease Space
A traditional sublease is when your business takes over a space and lease from another business. Companies sublease space for many reasons including: relocation, downsizing, moving, failure, expansion, and restructuring. When subleasing, it is typical to get discounted rental rates, especially if the overall commercial market is suffering.
If your company wants to be located in a certain area, but a direct lease isn’t in the budget or you want a flexible lease term then search for a sublease instead. It usually requires a little more homework and searching, but the extra work pays off with a more affordable and flexible lease. Another reason a sublease is great for younger businesses is that it lowers the initial cost of occupying an office. A sublease allows you to get into a space quickly and with minimal expense, because a subleases are usually built out (furnished, wired, etc.) and tend to be available immediately.
Particularly for small firms, sublets are often better than direct leases because the shorter term lengths are ideal for companies just getting started, taking on new projects, or scaling back. However, keep in mind that relocating and moving offices can be disruptive and costly, so you should always keep in mind how a short lease will fit into your long-term business plans.
Who is sublease office space for:
- Small to medium sized business
- Companies with uncertain future
- Business looking for flexible lease
- Business looking to keep overhead costs low
Pros and Cons of Sublease Office Space
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Examples of Sublease Space on Rofo
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Class A Sublease, 345 California St., San Francisco, CA |
Oakland, CA Office Space Sublease, 160 Franklin St. |
Office Space Experience Series: Direct Lease Commercial Space
A direct commercial lease is an agreement between your business and a landlord for you to occupy a space for a specified amount of time. It is beneficial to have an experienced broker assist you with the leasing process if you go this route. A direct lease is preferred if you are a stable well funded business whose future looks bright. A long term direct lease also gives you negotiating leverage with the landlord. If you are looking for a lengthy term lease (3-5 years) you should be able to get some concessions, especially in the currently depressed market.
Examples of Great Direct Lease Office Space on Rofo
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Here are some important things to think about before signing a direct lease agreement:
Length of Term: A long-term lease is a large burden for any business, especially if you are a small or medium sized business in today’s unstable market. Don’t let anyone talk you into a lease term you are not comfortable with. If you are a small business try and negotiate a lease term that is 1-2 year range and then discuss the renewal clause. Long term commitments usually benefit the landlord and severely limit your options if you outgrow the space, downsize or need to change locations. Landlords do not have incentive to find a subtenant if you break the lease because you are liable to pay for the entire term. Try and think about your lease as a total obligation instead just a monthly obligation.
Renewal Clause: Make sure you take a close look at the renewal clause. An unfortunate renewal clause could force you to move or sign a renewal for a term longer than you might need. Also determine what you want your options to be at the end of the lease. If you are planning to vacate the space the renewal clause is not as important, but if you are planning to stay make sure the renewal clause clealy states length of the renewal term and any rent increases.
Get it in Writing!: Never rely on an oral transaction, all terms should be in writing. Important things to be clearly written into the lease agreement:
- What is the landlord responsible for fixing
- Renewal option
- Common area maintenance fees (CAM), or any other costs that get passed along in a Triple Net (NNN) lease
- Tenant improvement allowance
- Security deposit terms
- Specifis of your personal guarantee of the lease
- Late charges on rent
- Insurance requirements, almost all leases require this, meet with a commercial insurance agent
Who is a direct lease for:
- Medium to large companies
- Well capitalized companies
- Companies with good cash flow
- Companies with a stable business not subject to volatile markets
- Companies wanting to occupy an office for an extended period of time (over 1 year)
Current Market Conditions: Current market conditions favor the tenant since there is copious amounts of space available. Do your homework on what the market has to offer and consult a commercial broker for additional help. When negotiating do not let the landlord push you into something you are not comfortable with since there is probably a similar space right down the street, but still remember to be reasonable!
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Office Space Experience Series: Shared Office Space
When it comes to leasing an office there are a few options to choose from. It’s helpful to know the pros and cons of each before making a decision for your business. The four main options are shared office space, direct lease, office suite, and sublease space. In this series of blog posts we’ll discuss each one. First up is the shared office.
Examples of Great Shared Office Space on Rofo
The Shared Office:
This occurs when a company has extra office space and leases it to one or multiple businesses. It’s possible to rent anything from single cubicle space to multiple offices depending on how much space the company doing the sharing has. A shared office is usually “Plug and Play”, so everything you need to start working is already there (furniture, internet, etc.), you just have to show up and plug in.
Each shared office is slightly different because the sharing companies usually have a different idea of how they want to structure the rental agreement. Make sure you ask about access to amenities and what is included in the rent. Sometimes companies can be very generous about sharing their amenities like conference rooms and Monday morning bagels, other times not so much.
It’s also beneficial to share with a company in a similar or related field. Just like with roommates in real life it may help your compatibility while working in the same space if you work in similar fields. For instance, if you are financial consultant and wear a suit and tie to work everyday you may not want to share an office with a laid back non-profit full of hipsters.
Finding a suitable shared office is challenging, but Rofo is here to help. New shared office spaces show up on Rofo periodically, so search around. The Rofo team is very conscious of the office space listing churn on the site, so feel free to contact us and we can send you some ideas. It’s also beneficial to reach out to your social networks via things like Linkedin, Facebook and Twitter because many companies may not immediately list space they are willing to lease. In today’s uncertain economic conditions this unused space is becoming more common, it’s a phenomenon referred to as “shadow space” in commercial real estate. You can also post a space need for shared space on Rofo and see if anyone sends you an idea.
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