We were approached by a local company who recently moved into a really cool old industrial building and signed a lease for more space than they need. They’ve offered us a sublease of half the floor (about 4000 sq ft), which is nicely divided from their space by a wall. On most days they only have 5-10 people in working, so our 46 (and hopefully growing) members would significantly outnumber them. Our members would walk through a shared hallway, then turn left into our space so they would not have to walk through the other company’s workspace to get to ours. The representative we are talking to says they are open to just about any financial arrangement. It almost seems too good to be true - almost. We currently own our building and the entire building is used by our coworking community, so this would be a big change. We’re concerned about a loss of identity from being in someone else’s space. We also not used to having to check with others when we want to do something to our space. Has anyone done anything like this and, if so, can you offer some pointers?
Hi Julia,
This could be great – but a few questions:
If you own your building, why do you want to move? Do you want to rent it out?
If these people are subleasing half, are they planning to grow into the rest of it? Would you be thrown out after you have established an identity in the new space, even if that is 3 or 4 years down the road?
Is the location as good as your current space? Location is almost everything!
Free isn’t free. Moving and new tenant improvement costs are significant.
I wouldn’t worry about being near them, since you’re not in the same space. The other issues above are more critical. As long as the location is good, you can get some signage and can establish an identity.
Barbara
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On Saturday, March 10, 2018 at 7:43:50 AM UTC-8, Julia Ferguson wrote:
We were approached by a local company who recently moved into a really cool old industrial building and signed a lease for more space than they need. They’ve offered us a sublease of half the floor (about 4000 sq ft), which is nicely divided from their space by a wall. On most days they only have 5-10 people in working, so our 46 (and hopefully growing) members would significantly outnumber them. Our members would walk through a shared hallway, then turn left into our space so they would not have to walk through the other company’s workspace to get to ours. The representative we are talking to says they are open to just about any financial arrangement. It almost seems too good to be true - almost. We currently own our building and the entire building is used by our coworking community, so this would be a big change. We’re concerned about a loss of identity from being in someone else’s space. We also not used to having to check with others when we want to do something to our space. Has anyone done anything like this and, if so, can you offer some pointers?
We’re investigating a similar arrangement in our small town of Hinesburg, VT (population 4,800). In our case, the current tenant has reduced headcount and wants to monetize the extra space. Given the small market, finding the right subletter will be a challenge for them, so, we’re planning to propose a revenue share model - they generate income that goes right to the bottom line as we fill the space and we cover costs of programming and other things. Most importantly, we’re not signing a lease, which is the biggest risk in small rural markets.
That said, having a clearly defined “Operational agreement” will be crucial, kitchen responsibilities, noise levels, access hours, etc. even if the spaces are somewhat separated. In our case, there’s a lot of overlap, so part of what we do will be creating space for the employees and our members to connect - and - offering our programming to the employees as an added value to the agreement.
Kindly,
Wayne
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On Saturday, March 10, 2018 at 10:43:50 AM UTC-5, Julia Ferguson wrote:
We were approached by a local company who recently moved into a really cool old industrial building and signed a lease for more space than they need. They’ve offered us a sublease of half the floor (about 4000 sq ft), which is nicely divided from their space by a wall. On most days they only have 5-10 people in working, so our 46 (and hopefully growing) members would significantly outnumber them. Our members would walk through a shared hallway, then turn left into our space so they would not have to walk through the other company’s workspace to get to ours. The representative we are talking to says they are open to just about any financial arrangement. It almost seems too good to be true - almost. We currently own our building and the entire building is used by our coworking community, so this would be a big change. We’re concerned about a loss of identity from being in someone else’s space. We also not used to having to check with others when we want to do something to our space. Has anyone done anything like this and, if so, can you offer some pointers?
I think the idea situation is owning the building and would not give that up. And moving is not I think all that easy for a community.
Is it possible to open another location instead of moving? It is what we have done. All the locations we have are joint venture or revenue sharing, except the original which is in a building I own. All new memberships, approaches, ideas, and what have you start in that location, because owning the place gives you so much more flexibility to try things out.
It is not an approach I recommend for everybody, because for starters it is important to be able to work with the expectations and wishes of the partner and not everybody is really up for that. In general landlords are in a different head space than spae operators and it is necessary to be very clear about what they expect and what you expect. People do tend to be rather more hopeful than clear in approaching this kind of project and that can make things difficult two yearws out just when everything starts rocking along.
Just some thoughts, always open to more discussion!