New York Business Journal asked SquareFoot’s Jonathan Wasserstrum about the future of flexible office space and what it means for clients that turn to companies like SquareFoot and WeWork to assist with their growth.
SquareFoot works with growing businesses to help them find their next office space, whether that is a coworking space like WeWork or to find them a suitable office of their own.
Here is what Anthony Noto from New York Business Journal asked Wasserstrum
‘There are a lot of risk factors to investing in WeWork. Should investors be nervous?’
‘There is potential risk in investing in any stock. There’s nothing specific about WeWork as it relates to a publicly-traded company that makes me more concerned about it than any other company, especially new tech IPOs, in the stock market,’ Wasserstrum explained.
The office space market has become increasingly more active. This is thanks to companies like WeWork who highlighted issues in commercial real estate leases for many companies in New York City.
‘In a lot of ways, WeWork showed a crack in the dam as it relates to length of leases. Historically, shorter lease terms were not an option for many companies. With WeWork, and their cousins, lease flexibility became an option. While WeWork is a great product, it’s not a one-size-fits-all solution, Wasserstrum said.
More Flexible solutions
Due to more businesses needing flexible office space leases, we at SquareFoot have seen our clients choose coworking or other flexible options. Many people found spaces they could envision as their next offices, however, they ran into a challenge they couldn’t overcome: They were unable to commit to the 5-10 year leases that landlords typically demand.
FLEX by SquareFoot
This predicament led us to introduce FLEX by SquareFoot. FLEX is a creative solution we developed to cater to this growing pool of companies looking for shorter terms and fair deals. In select cases, we will step up and take on those longer leases on behalf of our clients so that they can move into the spaces they have decided is right for them.’ said Wasserstrum.
‘If they decide to move out at the close of their term, we’re confident that we can find another tenant to move in who will, likewise, be looking for a shorter lease. Offering this kind of flexibility on terms for our clients has never been done before. We are changing the conversation already with clients about what’s available to them, what’s possible on their budgets.’
WeWork is poised for growth
These ongoing trends in flexible office space led Wasserstrum to see WeWork as a business that is investing in growth. ‘They’re seeing the dividends pay off from it. WeWork’s underlying business model makes sense to us. But it can be a capital intensive business so you have to be making investments behind that, which don’t pay off the day after you make the investment.’