Executive Suites & Flexible Offices Are Ideal Real Estate Solutions

2009-01-21T07:10:00.000-08:00

From New York Times: For Tight Times, Office Space on Flexible Terms

Despite New York City’s depressed economy, there is a flurry of activity in at least one niche of the real estate industry: business center companies, also often known as executive suites.

Since the middle of last year, such companies — which rent out furnished office space on a short-term basis, offering services like a receptionist, mail delivery and telephone-call answering and screening — have opened new facilities in the Dumbo neighborhood of Brooklyn, the Inwood neighborhood of Manhattan and in One and Five Penn Plaza, near Penn Station in Manhattan.

Two floors of suites are to open this month at 1515 Broadway, a 54-story office building in Times Square. And the Regus Group, a company listed on the London Stock Exchange, is adding two Manhattan sites, bringing its total to 18. It is investing $5 million on new centers at 100 Church Street and 1501 Broadway. The former is opening this month, and the latter in the second quarter of the year.

Industry officials and observers say business centers — which vary widely in terms of furnishings, services provided and rents charged — are ideal for displaced or downsized businesses or start-up companies seeking space without long-term leases. But they also say the timing of the opening of New York’s new business centers is unrelated to current economic conditions; most have been planned for a while.

Renting an executive suite is a “very, very easy way to do business if you need only one or two offices,” said Kathy Donohue, president of PowerSpace and Services, which runs the new business center in One Penn Plaza and is a subsidiary of Vornado Realty Trust. “You don’t have to lay out capital; the infrastructure is set up; you can lock the door and not worry.”

John Humphrey, a co-founder and co-owner of Sustainable Energy Partners, a clean-energy consulting firm based in San Francisco, recently set up a New York office in Green Desk, the business center in Dumbo. He and another consultant occupy a 100-square-foot space, which is furnished but has no door, for which he pays $700 a month.

Green Desk “really simplified the process of opening an office,” Mr. Humphrey said. “Sizing is flexible — if I grow, I can move into a larger space. And they handle office stuff, like receiving packages and making sure the Internet and phone work.”

D. Edward Bungert, a vice president of World-Wide Business Centres and president of the Office Business Center Association of New York, estimates Manhattan has 60 to 65 business centers, run by some 25 companies and generating annual revenue of $100 million. All of these numbers are up from two or three years ago, he said, when revenue totaled about $75 million to $80 million.

Some industry officials say they believe weakness in the rental market will create attractive expansion opportunities for business center operators.

Regus is the largest operator in the city, running suites under the names Regus and HQ. It leases office space on a long-term basis, and then sublets the space on a short-term basis to its own tenants.

Other business center companies that lease the space they later rent out include Rockefeller Group Business Centers, Sunshine Suites and Wurk Environments, which is the operator of the new center at 1515 Broadway.

Some companies operate business centers in buildings they own. Besides Vornado, these include Edison Properties, which operates a business center in the Hippodrome Building, at 1120 Avenue of the Americas. In addition, Edison, which also owns Manhattan Mini Storage, rents out loftlike office spaces, marketed under the name Workspace, in three of its storage buildings: 5030 Broadway at 213th Street, 131 Varick Street at Spring Street and 55 Vandam Street at Varick Street.

Another company, Pearl Realty, a Brooklyn-based developer, owns a turn-of-the-20th-century former coffee factory at 155 Water Street in Dumbo, where Miguel McKelvey, the general manager, said $5 million had been invested in refurbishing the building and starting up Green Desk. Jack Guttman, president of Pearl, owns half of Green Desk.

Each of the building’s six floors covers 4,000 square feet and is divided into some 30 offices. These range in size from 25 square feet — one desk in an open cubicle — to a 500-square-foot office that accommodates up to seven people.

Monthly fees for Green Desk’s tenants range from $375 for a one-desk cubicle to $3,500 for the 500-square-foot office; these charges cover Internet access but not phone service, which is extra. Besides Mr. Humphrey, tenants include a calligrapher, a tour operator, an investment manager and a fashion designer.

Wurk occupies the 11th and 12th floors of 1515 Broadway. Each floor is 33,000 square feet, divided among 100 offices. With décor by Swanke Hayden Connell Architects that features Haworth modular office furniture, and views of Times Square and the Hudson River, each floor has a reception area for a concierge and other support staff, a cafe, a business lounge and conference rooms.

Monthly rents start at $1,500 for an 85-square-foot office with one desk and a door that locks, and go as high as $16,000 for an 800-square-foot office accommodating 14 people. Internet and telephone access and other support services are an additional $400 each month for each person.

Edison’s Workspace offices — which provide Internet capability but few other business center services — range in size from 150 square feet, available for $650 a month at 5030 Broadway, to 1,400 square feet, offered at $5,000 a month at 131 Varick Street. Tenants include artists, graphic designers and film production companies.

The depressed economy appears to be affecting operators differently. For example, Joseph DeTrano, a vice president of Wurk, said it had signed up “more tenants than we had planned for at this point.”

But, over all, Mr. Bungert said, “business is down for all operators, some a little and some a lot. We have seen a slight uptick in demand for space for five or more people, and much less demand from a single-office entrepreneur starting something new.”

For the first quarter of this year, Regus is giving one month’s free rent to Manhattan tenants who sign a minimum 12-month agreement. Mark Dixon, chief executive of Regus, said that although “demand levels are good,” the company was experiencing “increased levels of move-out.”

Google Leases Office Space in Fairfax VA

2008-12-10T03:23:00.000-08:00

From Market Watch: Google's Search for Virginia Office Space Finds Fairfax County Location

Google, which has developed innovative search technologies for Internet users, has chosen a Fairfax County location for the headquarters of its federal enterprise sales team. The company took advantage of a community open house today to announce that it will launch philanthropic partnerships with Fairfax County Public Schools and with Reston Interfaith, a nonprofit social services organization that serves northern Virginia.

Google leased about 15,000 square feet of space at 1818 Library Street in Reston Town Center.

"Google's decision to locate here shows again why Time magazine called Fairfax County 'one of the great economic success stories of our time,' and the company will be a great addition to the innovative technology community that is a hallmark of Fairfax County," said Gerald L. Gordon, Ph.D., president and CEO of the Fairfax County Economic Development Authority. "It also is exciting that Google will partner with our public school system and Reston Interfaith. It's another great example of the corporate citizenship that economic development fosters."

Google will work with Fairfax County Public Schools to incorporate Google Earth and SketchUp technologies into the curriculum to enrich the K-12 learning experience in a variety of subjects. Google will work with Reston Interfaith to help it use Google technologies to empower people it serves, starting with a Fairfax County shelter for the homeless.

"It's really important for us to build relationships in communities we work in," said Mike Bradshaw, Google's director of federal enterprise sales. "We're proud to be a part of this robust business community, and proud to work with the federal government for the long haul."

Business growth helps Fairfax County fund public services such as a top-ranked public school system that improve the quality of life. Fairfax County offers a well-educated workforce, diverse real estate opportunities, access to domestic and international markets through Washington Dulles International Airport, and a business community based on technology and professional services.

The Fairfax County Economic Development Authority (www.FairfaxCountyEDA.org) promotes Fairfax County as a business and technology center. The FCEDA offers site location and business development assistance and connections with government agencies to help companies locate and expand in Fairfax County. The FCEDA maintains marketing offices in San Francisco, Bangalore, Frankfurt, London, Seoul and Tel Aviv.

Office Space For Rent

Executive Suites & Flexible Offices Are Ideal Real Estate Solutions

Google Leases Office Space in Fairfax VA