The Global Workspace Association recently hosted an “Ask Me Anything” webinar featuring industry expert Nick Bratton, a flex office strategist with extensive experience in commercial real estate. Bratton shared valuable insights into the current state of the flex office market and strategies for success.
Key Points from Nick Bratton’s Discussion
Efficient Layout and Dynamic Pricing
Bratton highlighted the importance of efficient layouts and dynamic pricing to ensure profitability. He pointed out that many operators underestimate the value of private office spaces, which are crucial for consistent revenue. “A lot of people take over old space and think they can go really cheap on the layout, leading to insufficient private office space. While models without a heavy focus on private offices can work, they are much harder to execute successfully. The more straightforward path to profitability often involves a layout with 50% or more private offices, similar to a Regis setup,” Bratton explained.
Balancing Private Offices with Event and Amenity Revenue
Bratton also discussed the need to balance private office spaces with revenue from events and amenities. He emphasized that while additional revenue streams are beneficial, they should not overshadow the primary income from private offices. “If you don’t have enough private office space, you won’t have enough people to utilize your amenities, which can lead to underutilization and decreased profitability,” he advised. The priority should be to cover hard costs with private office revenue, using other income sources as supplementary.
The Importance of Expertise in New Coworking Ventures
For new coworking ventures, Bratton underscored the value of seeking experienced professionals’ advice. He likened the role of an entrepreneur in the coworking industry to that of a general contractor or project manager, assembling a team of experts to ensure the project’s success. “The number one thing is to go out and find people who know what they’re doing. There are many smart and willing professionals in this industry who can offer invaluable insights,” Bratton noted.
Real Estate Investing and Valuation
Bratton provided insights into real estate investing and valuation, particularly the advantages of owning the building where a coworking space operates. He recommended a triple net lease structure when leasing to oneself, as it offers flexibility and can make the ownership entity more appealing for future sale. “Owning the building can provide long-term stability and increase the overall value of the business,” he mentioned, emphasizing the importance of landlord relationships in maintaining favorable terms and conditions.
Conclusion
The AMA session with Nick Bratton offered a wealth of knowledge on managing and optimizing coworking spaces. His advice on layout efficiency, dynamic pricing, and the importance of private offices provides a clear roadmap for improving profitability in the flex office market. By leveraging industry expertise and focusing on solid real estate strategies, operators can position their businesses for sustained success in a competitive landscape.
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