When you are looking to lease a property, you may initially think that your principle financial concern is the monthly rent payment. However, there are several other types of payments... Read More
“Working in an office” isn’t a simple, overarching concept anymore. You can work in an executive suite, negotiate a sublease, rent space in a business center, or rent part of a coworking space, and that’s not even a full list of the options.
Those at this early stage of business development are often searching for something smaller, cheaper, and more flexible than what their more established counterparts want. Usually, that means a choice between coworking or finding an inexpensive renting situation like subleasing. Let’s look at each of the options in detail to help determine what’s best for your business.
The Advantages of Coworking
Coworking spaces offer freelancers, entrepreneurs, and sometimes small businesses the chance to escape the isolation and monotony of working at home or in a coffee shop. A coworking space is anywhere that multiple people come together to work on different projects for different companies. The space could look like an office, a lounge, a network of connected rooms, or just one giant room. Included amenities include WiFi, kitchen areas, and furniture such as desks, tables, and couches. Often, coworking spaces also provide seminars with guest speakers, shared office management and reception team, and office equipment like printers.
Possibly the most valuable perk of coworking is the sense of camaraderie and the opportunity to network. Many coworking stations are symbiotic ecosystems, where businesses can connect with freelancers, lawyers, clients, potential partners, and more. On a personal level, coworking spaces allow small companies to have a day-to-day social outlet beyond their team, and to see other businesses experience similar challenges in growing.
Reduced Cost through Shared Amenities
Renting an office can be very pricey. Renters have to furnish the space, purchase office equipment, pay for utilities, and potentially cover renovation and fit-out costs. Coworking spaces are turnkey ready, with shared amenities so you can focus on your business. Most landlords want tenants to sign a lease for at least three years, which can be too risky for some companies, especially startups. Tenants who travel and don’t always need the space may prefer the daily, weekly, or monthly payment options most coworking spaces offer. Costs for coworking spaces vary greatly based on factors such as length of contract and type of space. For example, a freelancer could rent a flexible desk (available 24/7), a dedicated desk (available during business hours), or a shared desk (a desk shared with one or more other coworkers).
Coworking spaces are specifically designed to spark creativity and foster a sense of community amongst tenants. Some coworking spaces have adjoined gyms, allow dogs, provide snacks, feature colorful furniture, or just have more interesting decorations. Want to play ping pong during your breaks? You can probably find a coworking space that has a table. As New Worker Mag writer Diana McLaren explained coworking: “I work from a place that has Friday drinks and a naptime space. How’s that cubicle looking?”
The Advantages of Renting Office Space
Renting office space allows businesses to tailor the space to suit their specific needs. This could mean purchasing and arranging the ideal furniture, doing construction, playing music, or putting up advertisements. And in most cases, renting means having the space all to themselves. In some subleasing situations, businesses will still work alongside other businesses, but subleasing still usually means having full access to several office rooms instead of just a couple of desks.
In a coworking situation, you might just have one desk to yourself and have to share conference rooms, tables, printers and kitchens with others. When you rent office space, the whole space belongs to your company. That means you don’t have to reserve the conference room, worry about someone moving your furniture when you wanted it left a certain way, or put up with another company leaving dirty dishes in the sink constantly. If you want to throw an impromptu office party, play music, host a conference, or have visitors, you can do that, and you don’t have to ask anyone’s permission. Let’s look at some more of the pros to renting office space.
Renting your own office space means that everyone within the space works for the same company. Coworking presents potential struggles with physical privacy, sound privacy, and information privacy.
- Physical privacy: In a coworking space, you don’t ever really know exactly who else is present. Strangers might look into your offices or just walk by often enough to be disruptive. The property managers might also give tours to potential tenants, causing noise and activity in the halls.
- Sound privacy: You can control the noise level within your own company to a reasonable degree, but if you have noisy neighbors, you can’t do much about it. Or, maybe your direct reports tend to have a lot of spirited discussions that might earn you complaints from the neighbors.
- Information privacy: Especially if you’re dealing with sensitive information—like people’s finances, social security numbers, personal backgrounds, criminal records, etc.—you may enjoy the freedom to speak in the privacy of your office instead of trying to find a quiet corner in a coworking space and stop talking every time someone walks by. Want to interview someone for a new position within your company? No problem! Just invite them to your private office without worrying about fielding questions from other businesses about the newcomer. Sharing a wifi network could also present security issues.
Wait a minute, you say. I thought renting cost most than coworking! Well, in most cases that is true. However, as your company grows to include more than a half dozen employees, you may find that it makes more sense financially to rent your own space. Here’s why. If a private office in a New York coworking space costs around $800 per month and you need 15 desks, you’re now paying $12,000 per month. You could just get a 2,000+ square foot office for a similar amount!
When you rent your own space, you can put your company logo on the sign above the door, on the window, and in the street outside. When you interview a potential employee or invite a business partner to visit, he or she will enter a space that reflects your company values and culture. The environment won’t be muddled with the values and cultures of the coworking company and the other tenants. Do you want customers entering your office to feel secure and comfortable? You can control the thermostat, noise level, decorations, and music choices, so the sky’s the limit. Also, renting your own space means your business can be listed on Google maps, making it easier for customers to find out where you’re located.
Still not sure? Ask a broker.
Hopefully after reading this article, you have some idea of what coworking spaces and rented spaces have to offer. Remember each has pros and cons, and every space is different. You should tour a few different options before making up your mind. Even more importantly, you should talk to a professional broker.
Our SquareFoot brokers can help you assess your situation, identify various renting and coworking options, and act on a decision. Our brokers are commercial real estate experts, and their guidance comes completely free to tenants. They’re here to help you sign for a space that’s perfect for your business, today and as you grow.
You can start by taking our Coworking vs Private Office Space Quiz to see what is right for your business.
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