Is a Joint Venture the Best Approach to Coworking for Owners?

The Benefits of a Joint Venture Approach to Owning and Operating Coworking Spaces

There are currently over 10,000 coworking spaces around the globe and both landlords and building owners are becoming increasingly interested in the coworking and flex space industry. There are great opportunities for operators with the right skill set and experience to partner with landlords. WeWork has built their empires with this strategy, dubbing it an “asset light” approach. Here are a few benefits and precautions you should take if you are considering a joint venture regarding coworking.

Why A Joint Approach Benefits Both Parties

Coworking Operator Advantages:

  • The capital needed to launch the coworking space can be shared with the building owner
  • With less risk, the operator can obtain financing easier which can result in a better fit out and enhances operations
  • With no residual obligations or personal guarantees, the impact of a failed operation is lesser.

Owner Advantages

  • If the coworking space is a success, the owner will see a higher return on the investment than with market rent
  • An owner can build in flexibility, allowing for changes to the property with short notice if an alternative opportunity presents itself
  • Landlords can boost their property profiles for location and leverage this to attract other tenants
  • Larger landlords experiencing successful relationships with operators can create relationships and provide for opportunities to introduce coworking into more of the portfolio
  • Landlords can rely on the coworking operator to run the day-to-day operations and not have to deal with the learning curve of a different business.

How to Establish a Partnership

First, you need to find a location that is on the market or even one that is off-market and figure out who the owner is. Make it easy for a landlord to understand what you are proposing. A real estate agent may not expect this kind of offer, but they are obliged to pass on any offers to their client so you should have all the paperwork prepared. A simple, comprehensive spreadsheet outlining set-up costs along with profit, cash flow and loss projections for the first three years are crucial.

Once you have picked the ideal location and you have a building owner open to a joint venture arrangement, you should be able to offer the landlord between 25-50 percent of the net profits while significantly reducing your capital expenses and start-up cost.

Additional benefits to building owners are also starting to be seen in the refinancing and sale of assets with a coworking and flex space component. Studies by JLL and CBRE suggest that office buildings with a coworking/flex space component of less than 30% of total space are receiving more interest from buyers and resulting in higher sale prices. Lenders are also providing additional value in their analysis if buildings have a collaborative workspace component.

Whether or not a joint venture is the best approach will ultimately be an individual decision for each property owner, but unless a landlord has the time, money and deep pockets to learn the skills required to run a new line of business more focused on hospitality and services than price per square foot, partnering with existing, well-respected operators is certainly an avenue to strongly consider.

Successful Coworking Venture With Proven Results

SharedSpace (www.sharedspaceatl.com), is a regional coworking business focused on creating modern, professional, and energetic work environments to stimulate the creativity and productivity of entrepreneurial businesses and their teams! Please don’t hesitate to reach out if your business is looking for creative opportunities to reinvigorate your workforce and brand with a modern coworking environment like SharedSpace, or if you are a property owner and are interested in partnering with us.

Community Spotlight: Mark Allenbach with Well Played

What drew you to the profession you’re in?

I can break that down into two categories; what drew me to research and what drew me to games.  I got into research because I was always interested in the way that consumers actually interacted with brands and products.  I love “theory” and “concepts”, but was always drawn to practice in the form or what consumers did in the real world. Research was a perfect fit and the idea that I get to interview people daily as a part of my job is just the cherry on top.  In terms of games I grew up playing them and always loved delving into new worlds and getting that very unique sense of completion one gets from a game. I also wanted to prove my Mom wrong when she said all that time trying to beat Mario Bros. 3 was “wasted.”

 

What is the best business advice you’ve ever received?

“No one knows what they are doing.  Just do it.” This is more of an amalgam of advice I got from professors in Grad School, colleagues and just observing work in the real world.  I was always scared to start a business because of all the things I DIDN’T know and thought people who were successful had some unique or specific knowledge.  I learned after several years working that it wasn’t what you know, but what you can learn and how you can deliver on what you promise regardless of whether you have done it before or not.

 

If you could run your company from any city in the world, what city would you choose?

I would probably choose London because I am a EPL nut, I like their relaxed (and frequent) attitude towards pints at lunch and I generally prefer cold and rainy to hot and arid.

 

What is the most challenging thing about your work?

Other than cash flow?  The biggest challenge for me is keeping up with the many hats you need to wear each day.  An account from 8-9 AM, a sales person at the 11 AM coffee, an office manager at 2 PM ordering PC supplies and a consultant from 4-8 PM doing groups.  It is VERY easy to get overwhelmed and behind and end up looking longingly at the couch in the elevator entry way for a nap at midnight when a deadline is looming.

 

How did you hear about SharedSpace and what makes it a good fit for your business?

SharedSpace has been great for us because we spend a lot of time at the office and having a vibrant, updated and all in one solution for a lease is great.  The staff is truly the reason we stay though. Whether paying bills or setting up an increasingly ambitious lab we feel like we have a lot of support in the team here who seem genuinely into helping us succeed.

 

https://www.wellplayedllc.com/

 

Why Coworking Spaces Make Employees Happier

Any company’s top priority is to attract and retain the best talent possible. This involves making greater investments in the people within the company and ensuring that their work environment is as comfortable and productive as possible. This is where a coworking layout and utilizing a coworking location either exclusively or for off-site meetings can make employees happier and ultimately more productive.

Millennials Favor Open Office Floor Plans

Coworking layouts are designed to offer open seating options, collaborative spaces and less cookie-cutter settings than a traditional office space with traditional cubicles and closed off offices. Millennials now make up more than 30 percent of the workforce in America and prefer open plan arrangements because it offers a better path to problem-solving, more intense collaboration and community development.

Offers Remote Workers a Way to Connect and Collaborate With the Organization

It is becoming common that companies have remote full-time workers and not contractors. One way to keep these offsite workers in sync and connected to in-office workers is to provide coworking opportunities that offer remote workers incentives to utilize and connect with other employees in a community-oriented flex/coworking environment.

On-site employees have the benefit of collaborating in person, but it is difficult for remote workers to experience this same kind of connection, which can inspire happiness and motivation even in a remote setting because they know they have the option to be in an office with other workers whether or not they are employed by the same organization

Coworking Boosts Autonomy and Productivity

Many workers agree that having great personal connections with other workers encourages productivity and research has shown that coworking can provide emotional benefits. In a recent study by Inc., 84 percent of the 700 coworkers surveyed said they felt more engaged and motivated in a coworking setting, 89 percent said they were happier, 83 percent said they were less lonely and 78 percent said that coworking helps keep them sane. It is no surprise that happier employees are more productive and collaborate better. The proof is in the numbers.

Coworking Establishes a Sense of Belonging

Working in a space with other people in your company and connecting with them even for a short chat at the coffee machine can change the entire outlook of an employee. You can grab lunch with co-workers and exchange ideas easily without having to jump through the hoops of setting up a formal meeting

Employees are more likely to feel like they belong in a space when they have the flexibility to collaborate with others in an open office layout. At the end of the day, when professionals make strong connections with the people they work with, it is harder for them to leave a company and also helps them establish friendships within the work sphere, improving productivity and connectivity among employees.

The success and adoption of coworking and flex spaces have proven it not a fad and it’s here to stay. What was once a trend has now become its own niche type of office space and everyone from small startups to large corporations are taking note of the happiness and increased productivity coworking layouts bring employees.

Sharedspace, is a regional coworking business focused on creating modern, professional, and energetic work environments to stimulate the creativity and productivity of entrepreneurial businesses their teams! Please don’t hesitate to reach out if your business is looking for creative opportunities reinvigorate your workforce and brand with a modern coworking environment like SharedSpace. Contact us today to schedule a tour of our facilities or for a consultation on your business.

How Can Building Owners and Brokers Utilize Coworking to Make More Deals

Coworking has now become a new normal in the office setting, and it is attracting every type of worker from freelancers to entrepreneurs and corporations. What started as a trend over a decade ago, it is now revolutionizing the way people work. Here are ways building owners and brokers can utilize coworking to make more deals.

Today, employees want an experience in the office to maintain a healthy balance of work and personal life. This demand is why mixed-use buildings are becoming increasingly popular and why concepts like co-living are bringing in investors from all over the world.

Landlords and property managers see the added value that coworking spaces can give their property. Coworking space is focusing on the hospitality aspect of their services. To be successful in the 21st-century office leasing business, operators need to offer unique offerings and amenities to attract and retain tenants.

Tenants are willing to pay more to have a better experience which can mean anything from coworking spaces to high-quality connectivity and access to unique events. While coworking operators are the ones who call the shots, property owners have realized how they can benefit from this growing trend and creating a community feel throughout their project.

Unique Benefits of Coworking in Your Project

If a coworking member outgrows the coworking space and they have had a great experience with the building, there is an increased opportunity that the tenant will look for a space within the building as opposed to leaving. Additionally, if a tenant has access to the coworking environment, it can be used as a marketing feature of the overall project potentially separating you from competitors.

Implementing coworking spaces can also help landlords and property owners stay updated on the latest trends in workplace design, management, and technology. Landlords have also found that coworking operators can be great partners in both managing and creating a community environment throughout the property.

Investment brokers at major brokers companies, such as JLL, CBRE and Colliers have stated that coworking, if handled correctly, can add 3-5% of value to a landlord’s project.  

Coworking monetarily increases the value of a building and property, the tenant’s perception and increases the number commercial real estate investors. While partnering with an existing coworking company can be beneficial, some landlords are even going so far as to operate their own brand of coworking within their buildings.

Major brokerage firm JLL predicts that by 2030, up to 30 percent of all office space will be in some form, flexible or have an open layout design. The report also cited a wide variety of factors for switching to the coworking office space approach such as financial incentives to a need for increased innovation and collaboration further proving that building owners and brokers can utilize coworking to seal more deals.

Sharedspace , is a regional coworking business focused on creating modern, professional, and energetic work environments to stimulate the creativity and productivity of entrepreneurial businesses. Please don’t hesitate to reach out if your business is looking for creative opportunities to reinvigorate your workforce and brand with a modern coworking environment like SharedSpace.

Do Remote Workers Out Perform In-Office Workers?

A study by the Harvard Business Review found that the number of employees who said they cannot concentrate at their desk has increased by 16 percent since 2008. This is just one study that supports the idea that remote workers perform better than office workers. Here are a few key reasons why.

Productivity Increases

With zero distractions in the office and better autonomy, remote workers have the ability to do more work in less time. A national survey by Sure Payroll showed that 65 percent of workers said remote work increased their productivity and another 86 percent noted that working alone allows them to hit the maximum productivity. According to Polycom, 98 percent of respondents said that “anywhere working” has a positive impact on productivity.

Better Collaboration

You may think that being away from colleagues would result in less collaboration, but in fact, it increases communication and fosters better collaboration. The distance demands more communication because workers cannot depend on physical proximity so they must constantly communicate with team members. Also according to Polycom, 92% of survey respondents believe video collaboration technology helps improve relationships and boasts better teamwork.

Balance

Office life is often infiltrated with absences since workers call out sick, leave early for errands or events, etc. Remote workers, on the other hand, do not need to make excuses and can design their workdays around the work that needs to be completed along with personal errands that need to be done. If a worker comes down with a cold, they can still work without infecting the entire office.

If they have an errand that needs to be run during the day, they can handle it quickly without losing an entire workday, or feeling they have someone looking over their shoulder. Off-site workers also feel more trusted and respected. In today’s competitive economy it’s about getting your job done  – not punching a time card.

Quick Stats

Buffer teamed up with Workfrom and Hubtaff to collect data from over 1,900 remote workers from around the world and created the State of Remote Work report for 2018. The report found that 90% of remote workers plan on working remotely for the rest of their careers because they are able to customize their workspace and style, adding to their personal preference to where and how they work.

The report also found that 43% of remote workers found the biggest benefit of working remotely to be the flexible schedule it offers.

According to a 2016 survey of remote American workers, 91 percent of people who work from home feel that they are more productive than when they are in an office. Another popular cited study from 2014 in which the co-founders of Chinese travel website CTrip allowed some of their workers to work remotely on a regular basis and compare their productivity to their in-office colleagues and the study showed that remote workers ended up making 13.5 percent more calls than those in office, which is the equivalent of almost a full extra day’s work in a given week.

It is evident  that remote workers can save companies money and can also help increase employee satisfaction which increases productivity due to the more flexible work environment. While working remotely is not an option for every job, there is clear evidence that it can have significant benefits in the right application.

Sharedspace , is a regional coworking business focused on creating modern, professional, and energetic work environments to stimulate the creativity and productivity of entrepreneurial businesses their teams! Please don’t hesitate to reach out if your business is looking for creative opportunities to reinvigorate your workforce and brand with a modern coworking environment like SharedSpace.

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