Which is Better: Business Centre Vs Long Term Office Lease

January 17, 2019 | Small Business Tips

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The answer to this question is not as clear as it used to be. Technology has given rise to staff mobility and the ability to work effectively from remote locations. Traditional offices are often located in densely populated city centres making commuting time – unproductive time. This same space is in high demand, is often at a huge premium cost, and frequently underutilized. Managers looking to improve efficiencies are considering decentralized staff, while maintaining a strong corporate city centre presence, all be it with a smaller footprint.

Alternatively, small business and entrepreneur’s starting up a new venture often simply cannot afford office space in large office towers since the rental cost is high. There are minimum office sizes that are often too large for a small company. Add to that challenge, the demand by property managers for long term lease obligations and personal guarantees, particularly if you’re a start-up. This all leads to a simple conclusion. A business centre offers a more cost-effective solution, and you can still occupy Class A facilities otherwise unattainable.

HERE IS AN EXAMPLE OF POTENTIAL COST SAVINGS AND ASSUMING THE FOLLOWING;

  • Minimum office lease for 1,200 Square Feet
  • Space required for 4 – 6 Staff
  • Shared working space, or private space with fewer workstations
  • Class A office in a highly desirable location
  • Typical construction costs, and conditions
  • Conservative net rents used, includes T.M.I.
  • Some additional costs may be included in lease, varies by property manager
  • Additional cost savings possible, by using office services on a variable cost basis, reduced staffing

The business centre solution is not the perfect solution for every situation. The more staff you have, the less likely that it will be cost competitive. This conclusion is challenged by the fact that organizations today are highly mobile, and the consideration is not how big the organization is, but rather how many workstations are required at a given time or at a given location.

Corporate offices are on average 70 % utilized. In a city centre location at $ 70 / per square foot, this is an approximate lease cost of $5,600 per employee per year, at 80 Sq. Ft. per employee. The consideration might be, is it more efficient to have some of the office space in a location more convenient to staff members, or the client? Should it be in a remote location, and in a flexible environment that can adapt to the needs of the business? This is the benefit of a business centre location. It may not completely replace the city centre office location, but could be a flexible remote office solution.

Law firms, as an example, often use business centres in suburban locations, to appeal to local clientele that simply won’t commute to a city centre for services. If you consider the use of Virtual Office Space as yet another alternative, the cost can be very low.

Here is the cost break down based on actual experienceof both worlds.

Which is Better: Business Centre Vs Long Term Office Lease

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  • I can’t go with any other choice...

    When I started my engineering business 4 years ago, I was looking for a space where it’s cost effective and at a prime location. It was a challenge! This is the best I could find, close to my home so the driving was faster, also the reception is exceptionally good. When you walk in the office, the welcoming atmosphere, the options I have here, I can’t go with any other choice.

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    Valluvan AlagirisamyInspar Inc.

  • You have the necessary simple structure which allows you to focus on your day to day job.

    We’ve been doing this for almost 8+ years on a full-time basis, and I’ve been with Officescape for just over 5 years at this point. Pretty much the length of our practice, we’ve been part of a certain shared office center. With Officescape, you get the advantage of amazing office space, professional staff to greet your clients, and not worrying about unnecessary procedures. You have the necessary simple structure, which allows you to focus on your day to day job.

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    Purvish ShahAdian Professional Services

  • It’s very professional and they don’t even know that its not our office!

    We started using Officescape primarily because we needed an address for mailing purposes and for our product. I use them for meeting rooms as well, when I bring my buyers in. It’s very professional and they don’t even know that that is not our Maxell office. It’s important for us to keep our profile image. Having a company in Canada for 16 years, our buyers are coming into our offices all the time, we still needed a space to have that place for our buyers to come visit us and vice versa.

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    Lynn LangMaxell

  • My experience has been very positive!

    I chose Officescape because the staff are really friendly, I found them really helpful and really resourceful. I also find the building to be really clean and really bright, I like some of the architectural design. They always greet my clients very friendly, always offer them coffee, tea, water and always say goodbye to them when they leave. My experience at Officescape has been very positive!

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    Ellen BradleyIntegrative Counselling Services

  • This is the perfect facility...to run your business

    I had the opportunity to use the Officescape location in Markham while working on a consulting project. Dave provides a top notch facility with excellent offices, boardrooms, connectivity, service and yes... great coffee. This is the perfect facility in Markham to run your business, meet your clients, and brand your company. Congratulations Dave on providing a much needed service to the business community.

    Mark FriedbergCognovative Business Services

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