What is a serviced office? How does it differ from traditional commercial space rentals? And why are they becoming more popular?
We’ll answer these questions and more about this innovative commercial real estate trend.
What is a serviced office?
It is a commercial space that you can rent that offers many more services than the traditional office. A serviced office is a step up from the conventional office space. These services may range from legal consultants you can hire for a discount as the building’s client to discounted high speed internet to house cleaning. Serviced offices originally catered to professionals just starting out on their own or were traveling to an area, but they’ve become popular with a much wider range of clients.
How do serviced offices differ from conventional commercial leases?
A conventional office lease typically has to be for a year or more. You can’t rent space on a month to month basis. This can make it difficult for a startup to find commercial space, though having a formal office adds to their credibility.
Serviced offices also offer a number of services, though this varies from provider to provider. They may provide a registered office and mail handling for freelancers, contractors and startups that want an official front. Serviced offices may provide a phone number or IT services to their clients.
You can rent additional facilities like meeting rooms, studies and even conference centers as required.
Serviced offices typically have lounges, but they may have on site cafeterias or coffee shops catering to their clients and your customers.
Why are serviced offices becoming more popular?
If you want to know why serviced offices are becoming more popular, think back to the recession in 2007 and how traditional facilities management killed so many firms. Businesses were faced with incredibly high overhead expenses like leases for space, equipment and services.
They weren’t allowed to scale down their commercial expenses the way they could scale their software licenses and server space. If they grew, they couldn’t easily scale up quickly, either, without paying a massive amount up front.
Serviced offices allow you to rent the space and services you need and nothing else. The month to month or quarterly contracts provide more flexibility, too. You can add an additional office or call center for your busy season and then scale back down after the end of the year.
You can pay for use of meeting rooms, equipment and add-on services the serviced office may provide but only as required. This not only lowers the overall cost of doing business but gives you more financial flexibility. In the end, this prevents many businesses from going under when cash flow ebbs. It also means they aren’t cutting critical services to their own customers to pay the rent for their downsized firm.
The flexibility of serviced office contracts means you can open an office in a new location or market and verify that there is demand for it, minimizing the cost and risk of the expansion. You also get move-in ready facilities, so you’re up and running faster. It already has power, water, office furniture and high speed internet. This actually makes serviced offices an excellent choice for business continuity plans and startups ready to move from the incubator into their first commercial location.
Depending on the serviced office, you may get 24×7 access to the building. And it has better security than the average small business, since the managed office has people there accepting deliveries and mail for dozens of clients 365 days a year.