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Short-Term High-Class Office Space Lavishes Tenants With Perks, Service

Posted on: Thursday, 5 May 2005, 18:00 CDT

May 2--Fireplaces in every office. A fitness center complete with a rock-climbing wall. Immaculate lobbies lined in marble. Professional, courteous staff standing by not just with top-notch administrative services, but also with fresh bagels, coffee or tea.

You don't have to work for a Fortune 100 company to enjoy the perks of Class A office space. Through executive suites services, also known as shared offices, spaces in such posh surroundings and the administrative staff that go with them can be leased for as little time as an hour or as long as several years.

David Kennedy, a portfolio manager, has leased an elegant office at The Office Club in Colorado Springs for almost five years. He chose the building because when it opened, it had one of the best setups for high-speed Internet access available locally. But the additional perks have kept him there.

"It's an awesome location, my office has a view of Pikes Peak and the (support staff) at the front desk do a super-duper job of representing my little company," Kennedy said. "To me, it's just a mix of the Class A office space, the Class A location and the Class A representation that the office support staff gives me."

The Office Club offers short-term leases of furnished spaces, administrative support, valet laundry service, kitchen access, staffed lobbies and reception areas and a fitness center that includes a rock-climbing wall, among other amenities.

When he built Office Club, owner Barry Farah wanted office space for himself and wanted to venture into the shared office space industry. Overall, the executive-style suites are less expensive than staffing a full office for one or two people, he said.

Locally, rent for most shared office space ranges from $350 to $1,200 per month. Prices go up based on administrative services needed in addition to office space.

"They're in a Class A office environment for much less in aggregate dollars than for what it would take (to maintain a full office)," Farah said. "The capability to access a high level of both technology and service at a fraction of what it would cost to do on their own -- that's the driver."

For Thomas Marron, an associate vice president for Presidential Brokerage, it's also a good way to rent real estate. The company's Denver office is 5,000 square feet, staffed with about 20 brokers and the administrative staff to support them. Leasing a full office and hiring receptionists and secretaries for Marron and his associate in Colorado Springs didn't make sense. Instead, Presidential Brokerage rented space in the Muhr Professional Building.

"We can have a small office without having to have our own secretaries right on site," he said. "It would not be feasible to have a receptionist and back-office person for two people.

"It's probably the nicest real estate space in Colorado Springs. It's like an old Victorian mansion with antique reproduction furniture, a giant chandelier -- it's just very posh. We're in a high-end business. It goes along with our corporate image," Marron said.

Owner Bill Muhr says his building is "as high-end as you can get anywhere in Colorado." Marron is typical of the tenants who lease shared office space from him.

"Generally they are financial investors, people who are concerned about the image of their business -- people who want to portray success to their customers," Muhr said.

According to the Office Business Center Association International, a trade association for shared office suites based in Columbus, Ohio, most shared office space tenants (22 percent) work in business services or consulting. Technology professionals make up 16.9] percent, followed by financial services at 14.4 percent and lawyers at 14.2 percent.

The practice of sharing office space began in the 1970s as an offshoot of the secretarial services industry, said Jeannine Windbigler, executive director of the business center association group.

"I think that a lot of the businesses back then were secretarial services. They provided services to different companies and then moved into offering office space," she said.

Jeffrey Landers, president and founder of Offices2share.com, launched his national shared-office search engine in 1998 from New York after his commercial real estate clients increased their demand for smaller offices and more flexible leases.

"One of the things I found was, there were a lot of people looking for small, short-term office spaces, things that typically real estate brokers don't get involved in," Landers said. "Many won't look at under 5,000 square feet unless it's for an existing client."

Landers' Web site features available space across the country -- including Colorado Springs -- mostly in major cities. He estimates that the New York and Los Angeles areas account for the highest number of shared office sites simply because those cities have the highest number of office spaces. Some clients lease a conference room for just a few hours to host meetings or conduct job interviews as they jet between coasts, he said.

Over the past seven years, he's seen the industry grow across the country.

"There's a lot more interest in it. Because there's a lot more interest in it, the field itself has undergone an expansion, the number of executive suites has increased," Landers said. "They're in every state, in most major cities. Even in secondary and tertiary cities people can find a niche that the big players aren't in."

Despite an economic slowdown in 2001, the industry is very much on the rebound, Windbigler said.

"I think everyone's feeling a lot better and feels the economy's improving. A lot of centers are expanding," she said. "It's very much on an upswing."

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Source: The Gazette

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