“We provide reliability and flexibility. Our services are able to operationalise our clients so that they can focus on the key aspects of success for their businesses. Our service provision is so robust that we sometimes contract with clients that are in other executive suites.”
Insightive.tv: How would you classify your business —do you consider yourself a coworking space?
Patrick: We are more of a traditional executive suite than a coworking space. We do some coworking, but it hasn’t been a major strategic focus for us as I think the profitability of the coworking business model is still unclear. Typically, we are more focused on offering what people now refer to as private offices. However, we focus heavily on the service component of our offices and offer a range of virtual office solutions along with flexible term office solutions.
Insightive.tv: What market forces are currently affecting your business and how do you see the business performing this year as compared to last?
Patrick: We have five offices in South Florida — close to 50,000 sq ft. I think that the challenge within the industry as a whole is that new entrants into the market have made it more competitive. The industry is also working to accommodate changes in how people work — where the drive for coworking has partially materialised. We work with the startup and freelance segments, for which coworking solutions make a lot of sense. But we mostly work with “micro-businesses” — one or two person businesses, such as solo practitioner lawyers or financial advisors who are still more interested in a traditional office or virtual office services. Our primary focus this year is on business development and marketing to augment the expansion of our services. I think that our performance will be a function of how effectively we deliver these changes. I am optimistic about our plans, but I don’t necessarily want to offer a prediction.
My facility, for example, is in more of a suburban location. I think it is particularly unclear how significantly coworking is going to grow in suburbia, as opposed to urban areas. But even in urban areas, the amount of outside funding makes it difficult to evaluate market trends related to its popularity and rent prices moving into the future. Companies like WeWork have been on an aggressive expansion spree. What will be interesting to see is if the discounted initial leases that they have been able to accomplish through an acquisition lead business model can transform into a sustainable platform once they reach a more steady state. We have to evaluate that disruption and decide if it is something we can wait out as these companies come to stand on their own from a profitability standpoint. The industry will continue to change and evolve.
Ultimately, we are approaching the market from the perspective of continuation rather than high-growth — most of our offices have been around since 2000 and we look at expansion from an opportunistic perspective, focusing heavily on the profitability of our existing offices. This means tracking performance as a factor of occupancy rate, over-all membership levels and revenue per member. We typically have around 1,000 members, but that fluctuates.
Insightive.tv: What are the main differentiating factors of your business model?
Patrick: We focus heavily on services, providing administrative expertise and customisation often not available at other facilities. I would liken us to the Ritz Carlton or Lexus of office real estate. For example, when it comes to phones, we have more customisation and a focus on call quality that goes beyond most other options. Our model typically utilises small teams that support specific clients and really get to know that business. We aim to answer within two to three rings and it is ultimately a different feel than using a large answering service. Many businesses appreciate and are able to leverage that good first impression. But this is also an area of change — businesses are less reliant on phones than before, we need to take that level of dedication and continue to apply it to other business pains. From a business development and marketing side, we also need to continue to connect with those businesses that place value on that good first impression and reliable support. We tend to customise all of our services à la carte for each individual client. However, we have some clients that are more interested in a flat fee. Once we get a sense of what the work entails, we are happy doing it that way.
We provide reliability and flexibility. Our services are able to operationalise our clients so that they can focus on the key aspects of success for their businesses. Our service provision is so robust that we sometimes contract with clients that are in other executive suites. As a small business owner, to me, there is a great deal of benefit knowing that you have effective partners so that your mind is free to focus on the other things you should be worrying about to grow your business. .
Insightive.tv: How do you decide what services to offer, and how do you see your portfolio changing in the future?
Patrick: Our service options tend to be responsive, but we have tried to be somewhat forward thinking. The key for us is to be good at test control. Because we are service orientated, our clients often ask us for a variety of things. We then assess the realisticness of the proposition and test it.
For example, close to ten years ago we started a bookkeeping service at the behest of several clients. This works well because it is easily scalable. For some clients, it is only a couple of hours a month. For others, we have a small team that essentially acts as an entire accounting department at near full-time employment. Because we have a high percentage of legal clients, we also provide legal services — legal secretaries, paralegals, electronic filing and help typing documents. We also provide general support staff that are available to any of our clients but are most often utilised by some of the micro-businesses who rent our space. This is particularly valuable as we are in an area of the country where it is hard to find good, part-time support staff.
On the other hand, several years ago we attempted to implement an outbound calling service. We found that the skill set of staff that are good on inbound calls isn’t necessarily great for outbound cold calling. The necessity to create an entire dedicated department, and the low client demand, made this an untenable service option.
Our services tend to be a very nice fit for companies that need part-time help — starting in the range of two hours a month upwards to 10-20 hours a week. If a team is going through a significant period of growth, it reaches a point where it makes more sense for them to have their own full-time staff. But we also have clients that have fluctuating periods of need. One specifically has a dedicated team of four working for them that are sometimes all engaged on almost a full-time basis but will scale down to only one person working part time on a project — depending on the business cycle. This provides a degree of flexibility that would otherwise not be available.
A lot of good opportunities are mentioned by clients, so we listen, test and proceed.
Patrick Ramsden is the Principal for Office Edge in Boca Raton. He is responsible for leading all aspects of the business within that location. With a history in consultancy, leading teams to provide analytical and technical solutions to a range of industries as VP of Professional Services at QDS and Sr. Engagement Manager at First Manhattan, Partick joined Office Edge in 2006. We spoke with Patrick to gain his insights on developments within real estate and understand how he views the growth of coworking.
Office Edge offers tenants customisable executive suites and virtual office solutions. Founded in 2000, they have created a niche centred on reliability and quality of service, providing their tenants with meeting rooms, reception services and administrative support solutions across five locations in southern Florida. Aimed to help tenants project a professional image, they provide professionals flexible corporate facilities on an as needed basis and in private office solutions.
Part of THE FUTURE OF COMMERCIAL PROPERTY series
Trends, Challenges, and Opportunities An Inside View