As this new age of brokerage and of property technology (dubbed PropTech) has progressed, more companies have also looked to tackle this problem; consequently, the way in which we think about office space has become less and less rigid. And I don’t just mean that traditional spaces are now being supplemented with a variety of coworking solutions — I mean that there is more understanding and acknowledgment of office needs that companies have at each stage of growth. Coworking is one of the many solutions that ladder up to flexible solutions more broadly, but it doesn’t end there.
Beginning from there, however, has allowed us to look at the broader funnel of company growth and cater to those audiences who have long been around and in need, but who have historically defaulted to solutions that were not ideal for them — be they traditional leases, coworking solutions, or the classic working-out-of-your-garage situation. This is what led us, in February 2019, to jump at the opportunity to acquire PivotDesk, an innovative office-sharing marketplace that allows companies to rent out their extra space to growing businesses that need a few desks but that may not feel that the coworking environment is right for them.
This is an ideal situation for each party in the transaction, as the “landlord” company is able to offset the costs of a space that may be too large for them currently, but that they plan on growing into.
The renter can enjoy the benefits of stability and of a comfortable, traditional office atmosphere while avoiding the premiums that traditional coworking services often work into their fees. This unique style of coworking further expands the pool of office space options that small companies have, and better targets specific needs that were previously not being addressed by the market.
Another solution that we’re excited to offer was FLEX by SquareFoot, a product that we launched in June 2019. With FLEX, the primary goal is to target those in the middle stages of their growth, where coworking is no longer a viable option but neither is a commitment to a long lease term. The priority for these companies is to be able to retain flexibility as they scale since they’re often not able to forecast their headcount for a few years in the future. We assume responsibility for the lease and agree on a lease term that suits our client’s needs; at the end of that term, we identify other clients for whom this flexible lease is the right choice. In order to maximize the flexibility afforded to our clients, we also provide a move-in ready experience that eliminates the need to invest in furniture, telecoms, and more.
FLEX has allowed us to change the typical commercial real estate narrative by not just asking what a company needs today, but rather helping them to make appropriate decisions that suit their needs today, tomorrow, and the day after that.
I would be remiss not to note that what enables us to offer such a service is our demand-first model: instead of hypothesizing that a need exists and then sourcing clients who meet our criteria, we’ve been able to craft the FLEX model by getting a robust understanding of the needs of our clients and innovating accordingly. We’ve also been able to attract top talent that understands the inherent value of such a model — in 2019, Michael Colacino, former president of real estate giant Savills Studley, came on as our President and currently has a major focus on managing FLEX. This year, we were lucky to be able to hire Brendan McGee, who has spent the last 12 years at TechSpace, one of the nation’s major coworking companies. Being able to show them the value of our mission has only made me more sure of why this is the right path to take.
It’s clear that the demand for flexibility is not confined to one stage of growth — it’s valued by a wide variety of companies across the board. While coworking has revolutionized the commercial real estate industry, it’s only one piece of the larger flexible solutions model that, in my view, will define the future of real estate.