“We are currently the largest operator in the city as far as the niche we serve and we certainly intend on retaining that position. I see us as in a good position to pivot and take advantage of the changes and growth in the market.”
Insightive.tv: Can you begin by defining your business model — do you consider yourself to be a coworking space?
Justin: We align more with traditional business centres. However, we do have elements of coworking integrated into our system. The current zeitgeist is that coworking is the big explosive new market — but, in reality, the successful ones bring in a lot of revenue from dedicated space which is more inline with what you would call a traditional business centre. Many people look at shared and flexible offices as a new phenomenon but the concept has been around for decades. We were early adopters, beginning operations in 1984. And now by offering a subscription package, as opposed to a traditional lease model, that put us in a similar category as the newer coworking centres. I think one of the main differentiators is that many coworking centres focus primarily on community engagement initiatives. We capture aspects of that by having open desk and lounge areas and running monthly events at our spaces. But we also focus heavily on subscription based private offices. In both cases, we are catering to professionals and small companies looking for a top quality business presence. I think the broadest way to summarise our customer demographic is a business group of one to five people that has visitors — and the community aspect is one more benefit that many of our clients take advantage of. In all our subscriptions, we stress complete flexibility. Every single person, be that an individual with a basic subscription up to a business group with dedicated office space, have flexible terms that they can walk away from within sixty days.
Insightive.tv: How do you expect your workspaces to perform in 2017 versus last year and what do you see as the key market forces affecting your business?
Justin: I think 2017 is going to be a very positive year for us. We break up our services into two basic categories. We have the base subscription office service that every client subscribes to whether they have dedicated space or not, and we have the dedicated work space revenue. The dedicated office spaces are at about 82% capacity. I think there is some opportunity for growth in that regard. However, our subscription revenue is what has really increased in recent years. I think that our true growth moving forward is in that area.
The challenge for us is going to be how we accommodate this transition as more people realise they can work from home and dedicated office space comes to be seen as less of an essential need. This mobility is one of the key factors affecting our business and there is an opportunity for us to provide resources to entrepreneurs to efficiently grow their businesses. We have been in operation since ‘84, but it is only in the last several years that a more flexible workspace model has become mainstream. Companies like Regus have done a lot to help us in that they have spent a lot of money educating the public expanding the market that we are all competing to capture. Although, I would say we are different from a lot of our competitors and have a particular niche to which we cater.
At the moment, we don’t have specific plans to expand and are looking at a couple of revenue goals before making that move. But, over the next three to five years, we are looking at expansion and further development of shared spaces in new buildings. We are currently the largest operator in the city as far as the niche we serve and we certainly intend on retaining that position. I see us as in a good position to pivot and take advantage of the changes and growth in the market.
Insightive.tv: What services do you offer beyond a desk?
Justin: One of our other differentiating factors is that we work to pack a lot of value into our office service subscription. This includes the phones, access to meeting spaces, access to the coworking space and access to all of our locations — there are very few charges on top of that service. We look to keep it pretty simple. Some might view the subscription as a premium, while other see it as an incredible deal. We are looking to capitalise on the market that wants those services.
Our location flexibility is another factor we offer. Every client gets an allowance of conference room space every month, but that is not location specific. This allows our clients, who can advertise over the internet, to essentially offer a local service in every district of the city. As I said, a lot of our clients are business groups that meet with people — attorneys, financial advisors, professionals — and that city-wide flexibility is invaluable to their business.
Insightive.tv: Do you use technology to interact with your clients, or collect operation data to help you make choices concerning customer preference?
Justin: We use a workspace platform that helps us with scheduling, billing and other administrative tasks. We have a CRM system that we are working to integrate with our other systems — making that fully operational is our main technology goal at the moment. We use a lot of tools though our workspace platform to look at key indicators. One key factor we track as an indicator of tenant engagement is the number self-reservations being made. We have a reservation app that makes it simple to book a room on either a mobile or desktop.
Our secret sauce, however, is our staff. We have a twelve person team, and a majority of those people have been with us for ten plus years. They are not only very experienced but have been working with some of our clients for over a decade. They become part of their company, kind of like family in a sense. Our customer service and our ability to handle every situation really set us apart and we book high-level hospitality support.It is tough, though, because that is something that is hard to market and is really best experienced. But once people get here, they realise its importance. I think this is one of the reasons that we have been able to retain some great long-term clients. We have a few that have been with us for 30 years.
Insightive.tv: How do you see your market changing in the future?
Justin: I think that technology is a main driving factor of change. In the 80s, we had seventeen staff working in our first building providing word processing service and operator support — necessary services in the era before email and cell phones. Now we have five locations and twelve staff. We have grown and changed with the technology. Moving towards more shared space within our buildings is something that will grow in the future. We have a long track record in our city and have a lot of clients with whom we have worked with for a long time. We have really focused on developing our subscription service — offering flexible and serviced office space to clients looking to operate in a traditional building.
In our business, you can look at services divided into four quadrants. At the top is dedicated space and the bottom is “as needed space.” On the other axis is private space and non-private space. Those quadrants break down into private office space, dedicated desks, conference room or day offices, and coworking open-desk rooms. We have always operated in all of these markets, the change is the emphasis of these quadrants within our portfolio. We are working to keep our ear to the ground in terms of the markets and what our clients need.
Justin Myers is the General Manager and owner of OfficeKey. Justin grew up working in the business, painting walls and moving furniture in his teens. Following graduation, he honed his negotiating skills as a sales manager for Total Quality Logistics. Throughout, he acted as an advisor to his father and rejoined the company four years ago on a full-time basis. Justin is now primarily responsible for all day-to-day operations and planning at OfficeKey. We spoke with Justin to gain his insight into how OfficeKey fits into the coworking sector, how he perceived changes in the real estate market and how the future of the “office” is changing.
OfficeKey is a family run business centre that has been offering affordable and flexible office space since 1984. A pioneer in what has become the coworking sector, Office Key provides subscription based offices, conference rooms and services across Cincinnati to professionals and small businesses.
Part of THE FUTURE OF COMMERCIAL PROPERTY series
Trends, Challenges, and Opportunities An Inside View