Start a co-working or lease my property as office

Community Getting Started
1

hi Gang

I am based out of a major city in US and I recently had bought a commercial property in a suburb .

I redid the place into an office space which is still in the works, with the idea of converting it into a co-working space. The total space is around 3600 sq ft with 2 pvt offices, 4 phone booths, 1 meeting room, 1 large conference room and possibility of seating upto 50 people. There is room to convert some of the open space into cubes. When the place will be done, it will be a brand new modern office, which is completely done from scratch.

However I have a day job, and I was earlier thinking of having community managers manage the co-working space.

I was reaching out as I am in a dilemma of lease vs co-working space. The suburb and the larger county does not have a co-working space and there is definite demand - validated through surveys etc. This is a pretty big city - so not a remote suburb mind you.

If I lease the space, I get a pretty small return on my large mostly out of pocket investment. If I were to run a co-working, I am sure the return might be better, however it comes with upfront cost of getting furniture, and operating expenses of having a community manager. I am okay with all of these, however I was curious to know, how much of a bandwidth and commitment might be required for an owner, if there is say 1.5 community manager - managing the space. Note, my only fixed expense on this place is $2000 that I pay for the mortgage. Outside of that, I paid a lot of the tenant improvements out of my pocket. A realistic monthly revenue from the co-working space might be in the range of 10-15k (not being overly aggressive)

I was wondering if you could help me make in my decision making process, based on your experiences running and starting working spaces.

thank you in advance

2

Hi,
I have had a coworking space for 10 years. I currently have 3,500 square feet in a town of 160,000. I have 7 private offices, 21 desks, 1 small meeting room, 1 large conference room and 5 phone booths. Our revenue maxes out at $10K or there about per month. For a space this size, you need about 15-20 hours of staff time per week. However, it can be hard to just hire someone if none of you know how to run a space.

I don’t know what the answer is for you but those are my first thoughts.

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3

Angel’s experience is solid and Fort Collins sounds about like what you are describing. You have the advantage of having a REALLY close relationship with your landlord. My wife and I help people get started and when we’ve worked with the building owners it makes ramping up quite a bit easier. I think there is a lot of room to explore options like this.

I’m curious if people have other examples of landlord/operator partnerships and space operating agreements.