Lower your costs with a shared office space

Lower your costs with a shared office spaceIn today's economy it has become really important to make the best use possible of available resources. Office space is one of the most prominent expense items in a company and the foundation on which they can perform what they do the best. Therefore, it's also one of the most thoughtful decisions a business will make. Nevertheless, there's the possibility to lower fixed and variable expenses by sharing common areas with other business, while getting the most out of a professional community. This perfect equation is called shared office space.

The question is, what are the main benefits from renting a shared office space instead of signing a traditional lease?

  • A long-term lease no longer straps companies and they can rent for a day, a week, a month or for as long as they want to. This type of lease agreement will also allow you to grow without worrying about changing your office space.
  • Since multiple companies share common resources, they also share the cost of maintaining them.
  • Since multiple companies share common resources, they also share the cost of maintaining them.
  • As you hire more people you can take an additional spot and pay for it only when you need it.
  • Businesses can access to modern office equipment, on-demand secretarial services, enhanced security and networking opportunities with other tenants.
  • Shared office space usually comes furnished and with all network equipment ready for you to sit down and be productive within minutes.
  • There are many types of offices that are part of a shared setup. For example you can find private offices, large team rooms, coworking spaces and virtual offices.

On the other hand, finding an office space and negotiating a traditional lease takes time and money many businesses don't have. Apart from mediating rental rates, allowances and expenses; many ofthe leases come with clauses and terms that must be analyzed with legal counsel for companies to know what they're really getting into.

Additionally, if companies sign up a traditional lease there's a high chance they are tightened for years to be around in the same place, becoming a limit for companies that envision a rapid growth or must constantly renovate their space.

Another factor that must be studied with a traditional lease is what a business is paying for. For instance, security deposits, property taxes, renovations and common area maintenance must be paid aside from the regular monthly rent. This chart is an approximation of what a company can spent on a monthly basis if they decide to rent office space with a traditional lease rather if theyshare common areas, equipment and other services.

Broker 10-15%

A broker is usually in the equation of an office space search, therefore there's a fee included.

Furniture $10,000

It's likely to happen that the landlord will leave the space without any furniture because every business has its particular needs. Therefore, a company must calculate an approximate cost of up to $1,000 per desk

Maintenance and Cleaning $200-$500/month

Although many office buildings may count with a service agreement, a business must pay the cleaning company for daily routine cleaning and maintenance.

Legal Fees – $1,500

A portion of a company's budget must be destined to legal costs involved in a commercial space rental agreement. This may also include a lawyer that guides you throughout the process.

Tax – 6%

Some people sign traditional leases without asking if there is an additional cost for tax. Remember to take a close look at the registration before taking any decisions.

IT – $150/month

This cost includes internet connections, phones, routers and cable installation.

Equipment – $4,000

Printers, copy machines and TV's may be a once in lifetime investment but are for sure expensive in an office.

Amenities – $50/month

Employees need some amenities for them to be happy and satisfied in their workplace. Features like coffee machine, water cooler, and a refrigerator make the whole difference. Some offices offer extra benefits like ping pong tables and large break rooms.

How did the concept of shared office space born?

When companies realized that being locked into a 5-year lease was a big risk to their financials, they started to look for ways to minimize this risk. They also noticed that a large portion of their space was not under constant utilization. Conference rooms remained empty for the most part, the kitchen area could accommodate more people than it currently did and when not running at 100% utilization, there were workstations and even private offices available. This is when the shared office space concept was born. Suddenly companies were receiving other businesses that started to utilize the otherwise empty spaces they had before.

Additionally, companies also realized an office's layout and design directly affected their employees overall satisfaction and productiveness, so that's when they started experimenting different outlines.

offices offer extra benefits like ping pong tables and large break rooms.How did the concept of shared office space born?When companies realized that being locked into a 5-year lease was a big risk to their financials, they started to look for ways to minimize this risk. They also noticed that a large portion of their space was not under constant utilization. Conference rooms remained empty for the most part, the kitchen area could accommodate more people than it currently did and when not running at 100% utilization, there were workstations and even private offices available. This is when the shared office space concept was born. Suddenly companies were receiving other businesses that started to utilize the otherwise empty spaces they had before. Additionally, companies also realized an office's layout and design directly affected their employees overall satisfaction and productiveness, so that's when they started experimenting different outlines. In fact, in the 60s, workspaces started to change a hierarchical and rigid layout to environments that supported interaction with their employees. From panels and cubicles to more human and artistic workplaces that were once imagined by brothers Eberhard and Wolfgang Schnelle, open space offices were finally being constructed.

IBM was one of the first companies to create spaces where workers could interact in other places besides a lunch table or the water cooler. In fact, a report on IBM ́s "non territorial office", describes their office as having "all office walls removed, [and] most desks and other permanent stations eliminated as well...All work is performed at laboratory benches and large round tables, and an individual may choose to work anywhere in the area that suits him or [is] convenient."

Another great example is how in 1974, Herman Hertzberger created the Centraal Beheer insurance company, designed so that employees could feel part of a community. Small workplaces and work groups organized in islands encouraged people to connect with each other.

However, although open floor layouts were becoming popular, there was no coworking or collaboration taking place. It was not until 2000, when "the push to create, innovate, and find the ‘next big thing' became the obsession of IT companies", where pleasant and informal spaces appeared.

Nowadays, the shared office industry is one of the major business trends. Operators around the world have created all kinds of environments to welcome a large number of companies under the same building while adding an extra value to their offering. As a matter of fact, statistic shows there were 542,000 people working in coworking spaces in the United States in 2017, and it's estimated to increase up to 1.08 million in 2022. [Data given by Statista]

Who is it not for?

Although shared office space has all of the benefits mentioned above, companies with very high levels of confidentiality or companies who need to welcome clients into their own space are not candidatesfor this kind of setup. Also, businesses with special requirements like large warehousing space or showroom types of setups may be difficult to accommodate.

How can OfficeList help?

For over 10 years OfficeList has been creating partnerships with more than 2,000 operators in the USA and Canada that provide office sharing opportunities. We can hand hold you throughout the process and get you in touch with the key providers where we know you would have all the support that can help your company focus on growing and thriving while forgetting all the administrative nuances related to renting.

Give us a call at 1-866-354-LIST (5478) to speak with one of our account managers who will take the hassle of searching for an office space out of your hands and turn it into a productive and enjoyable experience. If you prefer, you can also browse our property offerings and select the ones that you are interested on your own. Whichever way you prefer, just remember that our one and only mission is to make sure you end up in the best office space location you can possibly be in to achieve all your business goals.