Our thanks again to Dave Lorenzo , the Godfather of Growth, for featuring Wendy Spreenberg of YES! Your Exceptional Space on his Inside BS videocast. In this video (1:45) Wendy shares how YES! partners with Landlords to deliver above-market rents (in some cases 2 to 2.5 times market rents!).
This is especially important now that we are seeing waves of unprecedented vacancy in commercial office property across the country and a surge in potential defaults on commercial property loans.
A way to guard the value of the asset is to incorporate coworking/flex space into your property, in a footprint of 15,000 s.f. to 20,000 s.f.
Dave: Can we get a premium from the space? If we, you know, if we do if we make our space coworking space? Is there a will we be able to get a premium over? just renting it out to one company? And I know the risk profile is probably lower. But is there is there the ability to command a fee premium from that space? Wendy: Absolutely, because and that’s what we’ve seen in our experience over these last decades in fact. What we’ve formulated with our clients is this particular platform of saying, Look, you can invest, let’s just say $80, a square foot with your tenant and tenant improvement dollars, and collect $30, $40, triple net depending on the market that you’re in. Or you can spend a little bit more maybe $100, a square foot, create this coworking space. And then you can actually charge anywhere between $80 to $120 a square foot over that period of time. Yes, there’s an investment, but the upside is tremendous. The challenge is, of course, that this is a very mobile type of tenancy, but that’s why you charge a premium. It’s similar to the way that we think about going to the grocery store, versus going to 7/11 or a convenience store. You’re going to pay a premium for the convenience store but you’re in out, it’s easy. Walk in sit down, get to work, for example, in coworking versus the build out situation and office manager, people who can’t necessarily take care of you or you have to manage all of this yourself. That’s what coworking and flexspace can deliver
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