Move-In Ready
All-in-one office suites make a comeback.
Inc. Magazine, March 2005
By Bob O'Connor
Setting up shop in a garage wasn't exactly what Simon Platt had in
mind when he and three partners founded StoneTurn Group, a firm specializing
in dispute consultation and forensic accounting, last April. Platt had
just left a position at one of Boston's top accounting firms, and he
was accustomed to a traditional corporate office environment. What's
more, he planned to target tony law firms across the country, and a
home office in the suburbs projected an image that was less than professional.
What he needed was the right address.
Complicating matters was the fact that Platt wanted to go national
right away. But establishing offices in far-off cities seemed daunting
and expensive. So, at the suggestion of a partner's mother, Platt contacted
Regus Business Centres, a company that offers all-in-one offices --
suites that are ready to go, with everything from Internet connections
to filing cabinets to receptionists. Platt signed a lease, and within
two months, StoneTurn had offices up and running in four key markets
on both coasts.
The all-in-one turnkey office concept isn't new. Such suites were particularly
popular in the late 1990s, as high-tech start-ups searched for low-overhead,
low-commitment alternatives to traditional office space. But as the
economy cooled and commercial rents fell, many fledgling entrepreneurs
turned instead to short-term subleased offices, which offer many of
the same amenities, often at cheaper prices. These days, however, subleases
are a lot harder to find; that has led many start-up entrepreneurs to
head back to the all-in-one suites.
Regus, for example, says that business has jumped 15% in the past
two years. The company has leased space in 350 buildings throughout
the U.S., which it then tastefully outfits and leases to businesses.
Its Park Avenue offices in New York City, for instance, feature cherry
desks, well-appointed conference rooms, and walls that are adorned with
works of modern art. Rents tend to reflect the local real estate market
and are likely to increase as commercial rental markets heat up during
the next year.
Even if they do, office suites will be a relative bargain, especially
for cash-strapped start-ups. Platt's offices -- in Washington, D.C.,
Boston, Austin, and Walnut Creek, Calif. -- came equipped with telephones,
a T-1 connection, Web servers, a kitchen, and conference rooms outfitted
with white boards and stocked with bottled water. Regus also supplies
an information technology support staff, mail delivery services, a receptionist,
a maintenance staff, security, and an answering service, all of which
are shared by each suite's several tenants. For a total of 2,000 square
feet of office space in all four StoneTurn locations, Platt pays just
$150 a month for each of the company's 20 staff members. That's about
$36,000 a year, a little more than a third of what he probably would
be spending on traditional office leases. "We could not be here
without this kind of arrangement," he says.
And the benefits, Platt adds, extend beyond cost savings. His office
suites, for example, have provided him with a built-in network of fellow
entrepreneurs, including a mediation firm and a personal security service.
He even landed a client thanks to one of his neighbors. And when it
comes to presenting a polished image, having the right address on his
business card has proven to be essential, Platt says: "Credibility
is an important part of our business."
While they are usually thought of as quick fixes for start-ups with
small staffs, all-in-one office suites can also provide longer-term
solutions for companies with employees who telecommute or require flexible
work schedules, notes Michael Joroff, professor at the Massachusett
Institute of Technology's architecture school. And as Platt's experience
suggests, they are also a good option for new companies that are looking
to expand nationally without the logistical headaches.
Indeed, finding a shared suite tends to be far less time-consuming
than searching for traditional office space. There are now about 4,000
locations nationwide, according to the Office Business Center Association
International, a trade group. Regus, Office Suites Plus, and Premier
Business Centers are among the biggest national players. But you may
get a better deal with a lesser-known regional company. To find an executive
suite in your community, perform a free search on Offices2share (www.offices2share.com)
or check out the website for the Office Business Center Association
International (www.obcai.org), which features a directory of hundreds
of members throughout the country. Keep in mind that most all-in-one
office suites can be leased on a month-to-month basis. And the leases,
which typically run about one or two pages, are easy to understand compared
with traditional commercial leases, which are usually a dozen pages
long or more.
If there's one problem with shared suites, it's that you can't tailor
your office to suit your company's personality. Nonetheless, Platt says
he feels perfectly comfortable in his new digs and has recently upgraded
to larger suites to accommodate StoneTurn's fast-growing staff. He has
no plans to move into traditional office space anytime soon. His company,
he notes, could never afford a "real" office on M Street in
Washington, D.C., or on State Street in Boston. "This has saved
us thousands of dollars," he says. "Even if we had twice as
much money to spend on overhead, we would not have been at the right
address."
Office Suites 101
Explore Your Options
Depending on your local real estate market, a subleased office space
may be a better move.
Think Small
Regional office suite companies are more likely to cut you a deal than
national players, so shop around.
Read the Fine Print
Before signing a lease, determine which services are included in your
rent, and which cost extra.
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