December 2013 – Meeting Review

December’s Meeting – “Eliminating the Serviced Office Blind Spot”

by Emily Liner – Risk Management Associates

December’s guest speaker was Mark Ellis; Program Director, Global Facilities & Real Estate Agent of Tekelec. Mark has been a manager of over 25 leased office locations all over the globe. He has worked hand in hand with different types of real estate agencies in administrating his company’s portfolio. Having been involved in negotiating more than 75 lease contracts worldwide, he has gained quite a bit of knowledge and experience in working on agreements in the real estate world. These relationships has taught Mark how to reduce least cost over 30% worldwide for this portfolio and during our monthly meeting luncheon, he shared what he knows!

Mark’s session was titled: “Eliminating the Serviced Office Blind Spot.”  Too often serviced office contracts are put on autopilot. You get wrapped up in other aspects of your company’s decision makings, and before you know it, you’re caught on the “top tier” paying a very high rate for rent. Mark stressed the importance of actively working on your portfolio to avoid this from happening to you and your company.

So, what is a serviced office anyways?

Serviced Office may also be known as, executive suite.  It is typically a set of individual offices that are sublet from a larger suite of offices.  The space is leased out for small office spaces or workstations to businesses that don’t necessary need or can afford a large space. This method is very ideal for a company who has an employee that would be doing business away from main headquarters. Perfect for when doing business out of the country, but yet may still need a desk, maybe a receptionist, when not with a client. Many of these leases included additional services like housekeeping, receptionist and break room access.  Service offices are also good for a short term lease; new business development and small regional offices.

Before deciding on a serviced office agreement; one needs to pick the best broker possible who can help with the decision making process and someone knowledgeable, experienced and focused on negotiating with several serviced-office suppliers. Mark explains the best way to select a broker is first making sure they are aware of alternatives to Regus-type spaces; that they know all the facets and options that the area associated with the serviced offices and how they are able to negotiate the lease effectively. These brokers must be able to evaluate that “sweet deal” they found for you.  Now, not all agents will give you the proper focus to your serviced office portfolio. You must do you homework and find the right agent that will keep your best interest in mind.  A good broker will guide you on your negotiating powers won’t let you get stuck on the high-tier price bracket.  In finding a good broker, you’ll have the ability to negotiate the typical components of the lease term, rate, services provided, on-time costs, and operational flexibility options.

And lastly, always; always; always, pay attention to the bottom line! By being aware of your critical dates for renewal and termination, you’ll be able to update services and maintain satisfactory environment.