Co-working is a fast growing real estate option for small businesses and entrepreneurs, as it bridges an important gap and provides many benefits.
One of the biggest challenges for the start-up is deciding when to move out of the home office and into a commercial office suite. The home office can be convenient and cost-effective, yet it can also be isolating since it is likely not conducive to meetings with colleagues, clients or vendors.
Committing to a commercial lease for smaller companies is challenging because most landlords require a three- to five-year lease term and strong financial statements. The unpredictable and potentially exponential growth of a start-up can make committing to a long-term lease nearly impossible. Without a strong financial history of two years or longer, landlords could require large lease deposits, tenant funded improvements or a personal guaranty of the lease obligation.
Co-working spaces provide a great solution to this dilemma. These shared work-spaces provide a productive, professional and collaborative work environment with maximum flexibility. Entrepreneurs and start-ups can choose to lease shared desks, cubicles or private offices. Most spaces also offer conference rooms or large meeting rooms available for lease. Monthly rates are typically based on usage and can range from as little as $25 per month to about $500 per month.
Users of co-working spaces benefit from a high image office space and office amenities without the high overhead costs. Additionally, these environments can facilitate collaboration and networking between fellow members and also provide start-ups with additional credibility that a home office or meeting at a local coffee shop fail to provide.
In San Diego, there are many options for anyone interested in a co-working option, with locations throughout the county from San Marcos to central San Diego. Some target specific users like Hera Hub in Sorrento Valley, which offers workspaces for women. Others focus on specific skills or interests. Co-Merge in downtown San Diego even offers outdoor work areas. Many provide more amenities than just a desk, including workshops and networking events.
“I have found co-working to be a great alternative with more benefits than I even realized,” says Melissa Murray of Styleology Group. “I enjoy the interaction with others, and the change of scenery from my home office improves my efficiency.”
Those entering the co-working world one should use caution, however. As reported in Money Magazine, the business model for co-working spaces has yet to be refined and many owners of such spaces are having trouble making the numbers work. The result is many spaces are opening and then closing quickly. Unless the space you are interested in is established, it is probably best not to put down a big deposit or pay for a long-term membership.
Smith is CREW San Diego’s vice president of membership founder of San Diego Office Properties, a division of KW Commercial, where she provides commercial real estate brokerage services. She can be reached at Lindsey Smith firstname.lastname@example.org.