Home    Sublease versus Co-Working Spaces. Which is the right one for you?

Hardly a day goes by without me seeing yet another article in the real estate news concerning co-working or managed office spaces. Each time I come across an article touting the benefits, I wonder why more tenants don’t take advantage or at least explore some other good alternatives that costs a fraction of the price and offer the same or more benefits, namely subleases that can either be shared with another company or private.

Just like co-working spaces or executive office centers, a shared sublease can offer all or most of the same benefits: flexible lease term, low security deposit requirement, furnished and wired space, the ability to expand or contract, shared meeting spaces, and a stocked pantry. The difference is that with a shared sublease you get full identity with your companies name on the door along with knowing the people you will be sharing the space with. With Co-Working or executive center space you get virtually no identity and you don’t know from one day to the next, who will be your neighbor. In addition to identity and having roommates you know, there are other advantages, including getting a bigger and better space, no additional charges for services and unlimited use of common areas.

The other option that is similar but for larger space requirements, are managed sublet spaces that come with services. There are companies now that take the obligation of a long term lease on a space at market rates and then turn around and sublease the same space back for about double what they rented it for. They justify the higher rent by offering a shorter term lease (typically minimum 2 years) and providing the convenience of a furnished space, which includes a stocked pantry and broadband services included in the rent. Hardly worth it when you consider the difference in cost.  Sublease spaces typically comprise the tail end of a lease, so they usually have a shorter term anyway, and trade below, not above, market, so you actually save money, not spend more. In addition, they offer most of the same benefits, including a furnished space that is fully wired, so all you end up paying extra for is the broadband service and stocking the refrigerator.  

I have built my career in real estate representing tenants and looking for the best value in the market for my clients. I would highly recommend that a tenant in the market looking for short term, flexible space lease, consider either a shared or private sublet space before committing to one of the more expensive managed space options.

Whichever direction you ultimately go, it always helps to have an experienced real estate professional at your side to evaluate all your options and help you make an informed decision that is right for you. With our experience and knowledge, and at no costs to you, we can evaluate all the options including the managed spaces and sublets spaces to help you decide which would work best for your business.

(с) Joshua Winslow

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