Well, we did indeed promise you truth-is-stranger-than-fiction stories of our experiences in the world of developing coworking spaces.
It’s a beautiful late-Spring day in a Midwestern town. We are traveling to meet with a prospective client who needs to reposition a 15-year old workspace to improve overall revenues and occupancy.
The town has developed from a remote and heavily rural community to a desirable bedroom community within 10 miles of a suburban hub of a larger metro area. New homes in the town now command upwards of $450K.
Based on our initial conversations, the onsite team has created a welcoming spirit and has been stable for 7 years. Currently, they generate approximately 35% of their revenue from additional services beyond space fees and technology. (for those not familiar, the average services revenue equals approximately 20% of overall business revenues) Our separate conversation with the onsite team confirms our impressions that they are competent, thoughtful and very service-oriented.
This is a productive work environment for everyone.
Location in their town is easily recognizable in a commercial/office area and is within 2 miles of trains to the metro downtown. A great option for prospective clients who need an office but only occasionally need to be downtown. Area amenities are increasing as the town develops. Specifically, a new health club and local restaurants have popped up within a quick drive of the building.
As the initial conversation outlines, the client owned the building but has sold it to the current landlord and they negotiated a very reasonable rental rate through the next 3 years. Their current occupancy is approximately 70%.
They’ve tried everything they can think of to advertise locally and maximize market awareness. Granted, their marketing materials could be updated, inclusive of their website. The owner has been very active in Chamber of Commerce networking and using local vendor/members for services to support the workspace.
The client is open to putting in some funds toward updating marketing materials tools as well as the appearance of the space, with a single exception. This exception is that updating the reception lobby and is simply non-negotiable.
As we drive into the parking lot, indeed, the lot is full of cars, the building is well maintained. Landscaping, decor, cleanliness all meet standards for a good, well-run property.
We enter the workspace lobby and determine EXACTLY why they client is having difficulty increasing revenues and occupancy. In addition to the 1950’s themed outdoorsman artwork throughout, we are greeted by a mounted equivalent of this
The client is an avid outdoorsman and this is a personal trophy that he insisted on displaying in the lobby. Talk about frightening small children and nearly all the female prospects to the space!
It took us 6 months of cajoling, reasoning, suggesting that finally convinced the client to relocate it off site on another property. The decor was updated at a reasonable cost and within 12 months (6 months post-trophy) the client achieved 87% occupancy and increased net profit by 18%.
Sometimes the client gets in their own way.
We could “bearly” contain our excitement at the outcome!
If you’d like to share a story, please reach out to us.
wendy April 20th, 2016