We also introduced the notion of how different these can be from the traditional client base, and how the decision-makers for each may have a different perspective on our industry. Moreover, we can confidently say that most still have very little experience in understanding what precisely we offer, how they are benefited from OBC space, and what the nuances are between serviced and traditional offices. It can also be surmised pretty accurately that the majority of the players making real estate decisions for the corporates sharpened their teeth in the “traditional” real estate world, and that their perspective on the differences between “us and them” is not as honed.
We must understand first and foremost how they analyze a deal, and what they look at when doing a comparison between both options. The idea of doing an “apples-to-apples” comparison between real estate options certainly applies, but the differences between what they are used to and fully furnished and staffed office environments are great.
When conducting a comparison between two or more traditional office space options, most will indeed conduct a detailed comparison, factoring in all the different capital requirements for each, and of course amortizing those in conjunction with base rent, etc. through the term of the proposed lease. When considering serviced office, they must do exactly the same thing, albeit understanding the fundamental differences between paying a premium vis-à-vis capital outlays.
It is vital for them to appreciate that while OBCs are fundamentally real estate dependent, we bring much more to the table than just space. They have to be “trained” to look at all aspects of what goes into the offering, and the factors that they have been trained to look for are much greater with OBCs, and not normally part of their comparison criteria. We’ll discuss this in the final segment.
Jon Turner is the ABCN Executive Director – Americas. He can be reached by phone at (949) 273-0935 or by email at [email protected].