What is a Serviced Office?
A need for office space does not necessarily dictate having to sign a traditional lease on exclusive space that may, or may not, be conducive to a company’s needs. There are other options, including serviced office space. Serviced offices are cropping up in major cities all over the world thanks to growing demand.
What is a serviced office? It is a commercial building owned by a facility management company that leases individual offices or complete floors. Renters benefit by being able to lease just the amount of space they need and no more. The ‘serviced’ portion comes into play in terms of building maintenance, housekeeping, reception services, and certain amenities.
What Does Serviced Office Space Provide?
A serviced office arrangement begins with a designated amount of office space as outlined by the lease. One company may lease multiple floors while another only needs a few offices. The building owner includes additional services, such as:
- Reception and call answering
- IT infrastructure, connectivity, and support
- Administrative support
- Telecom services
- Building maintenance and repairs
- Mail collection and handling
- Around-the-clock security
In addition to basic services, buildings are likely to include the kinds of facilities renters need. For example, conference rooms and public reception areas are generally available. Break rooms are another common amenity. As for utilities, they are included in monthly lease payments.
Who Uses Serviced Office Space?
New startups sometimes use coworking spaces or virtual offices but, more often than not, they gravitate toward serviced office space instead. Startups prefer serviced offices because they can get the exclusive space they need without making a long-term financial commitment to a traditional lease. Other serviced office users include:
- Established companies setting up remote locations
- Companies struggling with space restrictions
- Organizations in need of short-term space during expansion
- Companies or organizations that need dedicated project space
- Pop-Ups (companies or organizations that will only be in town for a short time)
Any organization requiring the benefits of exclusive office space without the financial commitment or long-term leases associated with traditional space is a good candidate for a serviced office. And of course, there are those long-established companies that stick with serviced offices simply because they enjoy the flexibility and scalability.
What Are the Benefits of a Serviced Office?
Every kind of work space arrangement has certain benefits that appeal to users. Serviced office space is no different. Indeed, the benefits of a serviced office can be very attractive:
- Flexibility. Building owners can be very flexible with both space and leases. They are more likely to offer short term leases with fewer commitments; they are also more likely to extend leases on short notice.
- Scalability. Serviced offices are scalable offices that can grow or shrink as needed.
- Low Start Up Costs. Because renters don’t have to invest in buildings, getting established in a serviced office environment involves comparatively low start up costs.
- Prestigious Address. Building owners know how important a prestigious address is to renters. Therefore, they tend to focus on the most coveted metropolitan locations to establish serviced office space.
- Support. One of the biggest advantage of a serviced office is the support provided. Support can range from full reception services to IT support to business center access.
Serviced office space gives organizations the best of both worlds. It offers them the space and services they need without requiring them to pay for things they don’t need. This is the main draw of serviced office space.
How Much Does Serviced Office Space Cost?
It is extremely difficult to pinpoint the average cost of a serviced office due to the volatility of the market. However, cost comparison estimates suggest that a serviced office costs anywhere from 50% to 75% less than conventional office space. Using the lower figure of 50%, consider the cost of both options in New York.
Cost of Serviced Office Space vs. Traditional Office Space
Market Watch estimated the average cost of traditional office space in New York at $6.16 per square foot in 2015. For a 1,000 ft.² office, the monthly rental payment would be $6,160. A serviced office costing 50% less would mean a monthly rental payment of just $3,080.
Saving 50% by going with a serviced office is significant. Imagine how much would be saved in a market where the savings were closer to 75%. No wonder the serviced office market has been growing in leaps and bounds over the last several years.
Small businesses, startups, nonprofits and others no longer have to settle for expensive leases on exclusive space. Thanks to serviced office space and other alternatives, there are less expensive and more flexible options.
Serviced Office Space in New York
Bevmax Office offers a comprehensive selection of office space all throughout New York City, including serviced office space and virtual office space. For more information about office types available, please contact us today.