To build offices or not?

I’ve read that the trend for members to want private offices. We are looking at the cost of up-fitting an open space and it sure would cost less if we didn’t have to build 5-6 offices. We realize we need to bulild a conference room and we have areas where phone rooms can be retrofit but the cost of offices really puts the cost out of reach. I realize that a yearly contract for an office of 3 or more people is a good bread and butter situation. I know Alex Hillmans Indy Hall space is open desk. Would love to hear about any others. Can you get yearly memberships on open or dedicated desks? We are thinking we can have some movable, screening dividers for teams of 3 or more. Would be nice to be able to add offices on an as-needed basis.

Nanette,

The more offices the better. The cost will be worth it. I started off with much the same thought as you. “A couple rooms will be fine” I thought. We put about 50k into a space with mostly open space and a few private rooms. In 6 months we learned 3 things:

  1. People with non private space memberships (virtual office / coworking) dont have as much invested and therefore dont stick as much. People with private space contracts are much more predictable.

  2. People really want a private space and are willing to pay for it.

  3. Dont build what you think they want (or what you want them to want) build what they are asking for.

So here is what happened. We had to move to another building with enough room to build offices. We lost the 50k we put into the first space because you cant take it with you (floors, network cabling, walls, paint…)

But thankfully our landlord saw the potential and worked with us to find a better solution.

Now we occupy 15k sq ft with 30 offices plus coworking space, and classroom space. Private office holders account for 85% of our MRR. We sold almost all of our private spaces in 3 months. Now we are at full capacity and building out a new location with 80+ offices in a high rise with our same landlord. We have become partners now.

I write all this to say I knew what I thought I knew and I had to learn the hard costly way. Work out with your landlord to get free rent or have them pay for the build out. Make it worth their wild and share revenues till they get their Tenant Improvement money’s back.

There are options for you.

Joshua Webb

Founder at Growthli

844-455-GROW (4769)
Https://Growthli.com

© Growthli | A Place To Learn, Grow, & Office™

ATTENTION: The contents of this e-mail message and any attachments are confidential and are intended solely for addressee. The information may also be legally privileged. This transmission is sent in trust, for the sole purpose of delivery to the intended recipient. If you have received this transmission in error, any use, reproduction or dissemination of this transmission is strictly prohibited. If you are not the intended recipient, please immediately notify the sender by reply e-mail or phone and delete this message and its attachments, if any.

···

On Mon, Jul 16, 2018, 9:58 PM [email protected] wrote:

I’ve read that the trend for members to want private offices. We are looking at the cost of up-fitting an open space and it sure would cost less if we didn’t have to build 5-6 offices. We realize we need to bulild a conference room and we have areas where phone rooms can be retrofit but the cost of offices really puts the cost out of reach. I realize that a yearly contract for an office of 3 or more people is a good bread and butter situation. I know Alex Hillmans Indy Hall space is open desk. Would love to hear about any others. Can you get yearly memberships on open or dedicated desks? We are thinking we can have some movable, screening dividers for teams of 3 or more. Would be nice to be able to add offices on an as-needed basis.

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Wow Joshua, great example! I was hoping to hear the opposite scenario. Thanks for the reality! The landlord for the mall says they won’t help with any build out. We’ll see what we can negotiate.

···

On Monday, July 16, 2018 at 11:21:21 PM UTC-4, Joshua Webb wrote:

Nanette,

The more offices the better. The cost will be worth it. I started off with much the same thought as you. “A couple rooms will be fine” I thought. We put about 50k into a space with mostly open space and a few private rooms. In 6 months we learned 3 things:

  1. People with non private space memberships (virtual office / coworking) dont have as much invested and therefore dont stick as much. People with private space contracts are much more predictable.
  1. People really want a private space and are willing to pay for it.
  1. Dont build what you think they want (or what you want them to want) build what they are asking for.

So here is what happened. We had to move to another building with enough room to build offices. We lost the 50k we put into the first space because you cant take it with you (floors, network cabling, walls, paint…)

But thankfully our landlord saw the potential and worked with us to find a better solution.

Now we occupy 15k sq ft with 30 offices plus coworking space, and classroom space. Private office holders account for 85% of our MRR. We sold almost all of our private spaces in 3 months. Now we are at full capacity and building out a new location with 80+ offices in a high rise with our same landlord. We have become partners now.

I write all this to say I knew what I thought I knew and I had to learn the hard costly way. Work out with your landlord to get free rent or have them pay for the build out. Make it worth their wild and share revenues till they get their Tenant Improvement money’s back.

There are options for you.

Joshua Webb

Founder at Growthli

844-455-GROW (4769)
Https://Growthli.com

© Growthli | A Place To Learn, Grow, & Office™

ATTENTION: The contents of this e-mail message and any attachments are confidential and are intended solely for addressee. The information may also be legally privileged. This transmission is sent in trust, for the sole purpose of delivery to the intended recipient. If you have received this transmission in error, any use, reproduction or dissemination of this transmission is strictly prohibited. If you are not the intended recipient, please immediately notify the sender by reply e-mail or phone and delete this message and its attachments, if any.

On Mon, Jul 16, 2018, 9:58 PM [email protected] wrote:

I’ve read that the trend for members to want private offices. We are looking at the cost of up-fitting an open space and it sure would cost less if we didn’t have to build 5-6 offices. We realize we need to bulild a conference room and we have areas where phone rooms can be retrofit but the cost of offices really puts the cost out of reach. I realize that a yearly contract for an office of 3 or more people is a good bread and butter situation. I know Alex Hillmans Indy Hall space is open desk. Would love to hear about any others. Can you get yearly memberships on open or dedicated desks? We are thinking we can have some movable, screening dividers for teams of 3 or more. Would be nice to be able to add offices on an as-needed basis.

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Yes, build offices. People with flex desks have less commitment; they’re more likely to be in transition and/or have financial issues.
Think of it this way: would you rather spend time pursuing someone who pays $1,000 x 24 months = $24,000 per sale, or $200x 6 months = $1,200 per sale? It’s roughly the same effort.

You should have enough private offices to pay all your basic overhead, including the minimum you need in terms of staffing.

Get leases signed to cover all your basic expenses so that then you can enjoy playing host to the people in transition, hosting events, and building community among your members.

···

On Tuesday, July 17, 2018 at 8:35:32 AM UTC-4, [email protected] wrote:

Wow Joshua, great example! I was hoping to hear the opposite scenario. Thanks for the reality! The landlord for the mall says they won’t help with any build out. We’ll see what we can negotiate.

On Monday, July 16, 2018 at 11:21:21 PM UTC-4, Joshua Webb wrote:

Nanette,

The more offices the better. The cost will be worth it. I started off with much the same thought as you. “A couple rooms will be fine” I thought. We put about 50k into a space with mostly open space and a few private rooms. In 6 months we learned 3 things:

  1. People with non private space memberships (virtual office / coworking) dont have as much invested and therefore dont stick as much. People with private space contracts are much more predictable.
  1. People really want a private space and are willing to pay for it.
  1. Dont build what you think they want (or what you want them to want) build what they are asking for.

So here is what happened. We had to move to another building with enough room to build offices. We lost the 50k we put into the first space because you cant take it with you (floors, network cabling, walls, paint…)

But thankfully our landlord saw the potential and worked with us to find a better solution.

Now we occupy 15k sq ft with 30 offices plus coworking space, and classroom space. Private office holders account for 85% of our MRR. We sold almost all of our private spaces in 3 months. Now we are at full capacity and building out a new location with 80+ offices in a high rise with our same landlord. We have become partners now.

I write all this to say I knew what I thought I knew and I had to learn the hard costly way. Work out with your landlord to get free rent or have them pay for the build out. Make it worth their wild and share revenues till they get their Tenant Improvement money’s back.

There are options for you.

Joshua Webb

Founder at Growthli

844-455-GROW (4769)
Https://Growthli.com

© Growthli | A Place To Learn, Grow, & Office™

ATTENTION: The contents of this e-mail message and any attachments are confidential and are intended solely for addressee. The information may also be legally privileged. This transmission is sent in trust, for the sole purpose of delivery to the intended recipient. If you have received this transmission in error, any use, reproduction or dissemination of this transmission is strictly prohibited. If you are not the intended recipient, please immediately notify the sender by reply e-mail or phone and delete this message and its attachments, if any.

On Mon, Jul 16, 2018, 9:58 PM [email protected] wrote:

I’ve read that the trend for members to want private offices. We are looking at the cost of up-fitting an open space and it sure would cost less if we didn’t have to build 5-6 offices. We realize we need to bulild a conference room and we have areas where phone rooms can be retrofit but the cost of offices really puts the cost out of reach. I realize that a yearly contract for an office of 3 or more people is a good bread and butter situation. I know Alex Hillmans Indy Hall space is open desk. Would love to hear about any others. Can you get yearly memberships on open or dedicated desks? We are thinking we can have some movable, screening dividers for teams of 3 or more. Would be nice to be able to add offices on an as-needed basis.

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To echo what everyone has said: we have a space of 11,000 square feet, and a minority of it is offices, with the rest being coworking and community shared spaces. Our offices bring in more than 50% of our revenue from only about 25% of our total space.

···

**Scott Novotny **| General Manager

503.548.0888 | urbanofficeplace.com

Thanks for all the advice. Gotta wonder how Indy Hall does it? Some kind of magic!

···

On Monday, July 16, 2018 at 10:58:50 PM UTC-4, [email protected] wrote:

I’ve read that the trend for members to want private offices. We are looking at the cost of up-fitting an open space and it sure would cost less if we didn’t have to build 5-6 offices. We realize we need to bulild a conference room and we have areas where phone rooms can be retrofit but the cost of offices really puts the cost out of reach. I realize that a yearly contract for an office of 3 or more people is a good bread and butter situation. I know Alex Hillmans Indy Hall space is open desk. Would love to hear about any others. Can you get yearly memberships on open or dedicated desks? We are thinking we can have some movable, screening dividers for teams of 3 or more. Would be nice to be able to add offices on an as-needed basis.

Its done with other people’s money. Most likely the landlord. If the one your with wont play ball. Then find one that will. Tenant Improvement funds are normal and someone who wont will likely be a bad partner long term. Be willing to look at other buildings. Dont let him dictate your future.

Joshua Webb

Founder at Growthli

844-455-GROW (4769)
Https://Growthli.com

© Growthli | A Place To Learn, Grow, & Office™

···

On Tue, Jul 17, 2018, 7:43 PM [email protected] wrote:

Thanks for all the advice. Gotta wonder how Indy Hall does it? Some kind of magic!

On Monday, July 16, 2018 at 10:58:50 PM UTC-4, [email protected] wrote:

I’ve read that the trend for members to want private offices. We are looking at the cost of up-fitting an open space and it sure would cost less if we didn’t have to build 5-6 offices. We realize we need to bulild a conference room and we have areas where phone rooms can be retrofit but the cost of offices really puts the cost out of reach. I realize that a yearly contract for an office of 3 or more people is a good bread and butter situation. I know Alex Hillmans Indy Hall space is open desk. Would love to hear about any others. Can you get yearly memberships on open or dedicated desks? We are thinking we can have some movable, screening dividers for teams of 3 or more. Would be nice to be able to add offices on an as-needed basis.

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The important thing for me is … quiet. More phone booths, some sound abatement, polite people, white noise, did I mention polite people? … go a long way towards getting max value out of any open office areas. I’m in space that has a variety of small conference rooms and largish phone booths, I wish they had more tiny phone booths that are literally just for making cell phone calls.

Also wish for a “library-like” culture of quiet but that might be too much to ask …

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On Monday, July 16, 2018 at 9:58:50 PM UTC-5, [email protected] wrote:

I’ve read that the trend for members to want private offices. We are looking at the cost of up-fitting an open space and it sure would cost less if we didn’t have to build 5-6 offices. We realize we need to bulild a conference room and we have areas where phone rooms can be retrofit but the cost of offices really puts the cost out of reach. I realize that a yearly contract for an office of 3 or more people is a good bread and butter situation. I know Alex Hillmans Indy Hall space is open desk. Would love to hear about any others. Can you get yearly memberships on open or dedicated desks? We are thinking we can have some movable, screening dividers for teams of 3 or more. Would be nice to be able to add offices on an as-needed basis.

Hi Nanette,

I specialize in coworking office build outs. Most of my clients state that the primary revenue is coming from office build outs. On average 50-60% of the revenue is driven from the private office space. We utilize demountable walls and partitions that can move with you as you grow. This type of solution is tax deductible under furniture which helps to reduce costs. Most of the spaces we are working on currently have a hybrid of private offices and open space desks.

Regards,

Sarah

http://spaceplus.com

[email protected]

···

On Monday, July 16, 2018 at 10:58:50 PM UTC-4, [email protected] wrote:

I’ve read that the trend for members to want private offices. We are looking at the cost of up-fitting an open space and it sure would cost less if we didn’t have to build 5-6 offices. We realize we need to bulild a conference room and we have areas where phone rooms can be retrofit but the cost of offices really puts the cost out of reach. I realize that a yearly contract for an office of 3 or more people is a good bread and butter situation. I know Alex Hillmans Indy Hall space is open desk. Would love to hear about any others. Can you get yearly memberships on open or dedicated desks? We are thinking we can have some movable, screening dividers for teams of 3 or more. Would be nice to be able to add offices on an as-needed basis.

Gotta wonder how Indy Hall does it? Some kind of magic!

Not magic. Just a relentless focus on creating value that has nothing to do with desks :slight_smile:

-Alex

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The #1 mistake in community building is doing it by yourself.

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