The flexible workspace industry has been decades in the making and today, there are tens of thousands of flexible workspace centers all over the world. The industry is home to a spectacular array of flexible workspace options providing everything from serviced and managed office space to coworking, hot desks, virtual office services, meeting room rental, and business lounges.
Around Allwork.Space, we’ve always heard that Fegen’s Law Suites were THE pioneers in our industry and the first to establish flexible office space in 1966. In the diligence of learning more of the history, we’ve found that OmniOffices Group, Inc. was founded 4 years before, although details are scarce.
We’d like to know more. So if you have more information about the early pioneers of our industry, or any other noteworthy company or milestone that you’d like to see included, please drop us a line.
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Serviced Office History
The OmniOffices Group, Inc. (OmniOffices) was created, a privately held executive suites company and an early pioneer of the industry.
OmniOffices was later acquired by real estate investment trust CarrAmerica in 1997, and in 1998 the two companies further expanded by acquiring HQ Business Centers. In 1999 the joint company became known as HQ Global Workplaces. HQ (and its predecessors) was eventually acquired by Regus (now IWG plc) in 2004.
On 1st August 1 1966, Paul Fegen launched a furnished law suite for attorneys. ‘Fegen Suites’ effectively laid the foundations of the serviced office model by leasing office space and fitting it with furniture, reception services, telephony, and conference rooms. Fegen Suites expanded and was incorporated as Attorneys Office Management, Inc. (AOMI) on 1st July 1970 and began providing virtual office services to law firms in 1973 (known as an ‘off-site tenant program’ at the time). Following the devastating recession of 1980-82, AOMI was restructured and later sold, although the Fegen name was retained. On 1st April 1990, Vince Otte acquired the company and changed the name to Barrister Executive Suites, which today has 30 business center locations throughout Southern California.
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Image grabbed from Fegen Suites website.
Alf Moufarrige founded Servcorp at the MLC Centre in Sydney, Australia. Initially leasing one-quarter of a floor, Mr Moufarrige eventually grew the business centre to 16 offices, all of which came with furniture and services. Then known as ‘multi-tenanted office accommodation’, Servcorp had acquired two floors in the MLC Centre, Sydney and a location in Melbourne CBD inside its first 12 months of trading. Today, Servcorp operates in more than 160 locations across the globe.
Richard Nissen founded Business Space Ltd at 35 Piccadilly in London in 1980, and later pioneered the digital exchange telecommunications system which launched the virtual office concept in the UK. Mr Nissen registered the trademark name in 1992 when the Virtual Office Group was established at 211-212 Piccadilly. After a period of 25 years, Mr Nissen relocated his serviced and virtual office business to its current address at 180 Piccadilly. The business is still going strong today.
1980 – 1982
During the 1980s, office technologies including word processors, personal computers, voicemail and fax machines became widely adopted. They began to eliminate some of the staffing roles required by businesses, and at the same time some of these services were offered by early business centers – negating the need to hire full-time staff for secretarial purposes.
At the same time, the early 1980s recession led to high levels of unemployment and bankruptcies. Businesses became acutely aware of the need to manage cash flow and reduce long-term overheads – including office leases – which is believed by some to have helped serviced offices gain a stronger foothold in the aftermath of the recession.
Regus.com states it was founded by Mark Dixon in 1989, but Allwork.space understands the company was actually founded in 1987 by Swedish company Reinhold. It later merged with Mark Dixon’s Crosslink company in 1989 to become Regus, currently the world’s largest business center operator. Today Regus, officially known as IWG plc is traded on the London Stock Exchange (IWG) and operates over 3,000 locations in 120 countries.
IZA Business Centers opened their first location at Torre Gia in Monterrey, Mexico, and today operates over 30 business centers in Mexico’s largest cities.
Also this year, The Executive Centre was founded, and currently operates over 125 serviced office locations across 13 countries. In the same year, David Saul, Simon Rusk, Bernard Klug and Colin Gershinson founded BE Offices (formerly known as Business Environment) in the UK; and the Rockefeller Group Business Centers was launched in New York.
HQ Business Centers and Omni Offices merged to become HQ Global Workplaces. It was later acquired by Regus in 2004 at a time when HQ had more than 300 business centers in the US and worldwide. That same year, Bernard De Koven launched the word “coworking” as a way to identify collaborative work, and 42 West 24 popped-up in New York City.
Stratis was acquired by Regus. Stratis had 12 centers with 3 under development for a $10 million deal.
Peter Kershaw, original founder of HQ Global Workplaces, bought back the European operations of HQ, which became known as Executive Offices Group (EOG), a high-end serviced office operator in London. 2003 was also the year that Office Evolution, a franchising workspace model, was founded by Mark Hemmeter. In 2005, EOG was sold to Morgan Stanley Real Estate Fund. In 2013, when EOG operated 28 serviced office locations in London, it was bought by Queensgate Investments and rebranded in 2014 to become London Executive Offices (LEO).
2007 – 2008
The mobile revolution. Consumers and entrepreneurs used Wi-Fi enabled handheld devices at home, at work and on the go. It enabled business people to work seamlessly from virtually anywhere, and radically changed the business landscape. Around this time, coworking began to expand and the term “coworking” was seen as a trend on Google’s database in 2007 for the first time.
2007 – 2009
Economic crisis and global recession. The credit crunch and ensuing financial crisis left a legacy of heightened cost efficiency measures. Arguably, many parts of the serviced office industry benefited from new-found business requirements for shorter office leases and greater flexibility. Yet business centers and coworking spaces weren’t immune to the recession, which left many with high vacancies and their own long-term lease deals to contend with.
In London, AIM-listed Serviced Office Group acquired Avanta Managed Offices, resulting in 37 properties as part of ‘Avanta Serviced Office Group’. In the same year John Arenas launched Serendipity Labs, a coworking franchise model, and Industrious was launched by Jamie Hodari and Justin Stewart. In 2015, Avanta Serviced Office Group was acquired by Regus (now IWG plc).
Regus made a significant move in the coworking sector by acquiring Spaces, a workspace operator founded in The Netherlands that’s now expanding across Europe, North America and Asia Pacific. 2015 also saw the launch of Chinese coworking brand UrWork.
i2 Office took over Landmark Offices, later re-branding to Landmark in 2018, and Regus acquired Basepoint, while additional funding from Japan’s SoftBank Group took WeWork to $20billion valuation. Chinese coworking brand UrWork merged with NewSpace and later partnered with Serendipity Labs to take on the global market. Also in 2017, the commercial property industry broke ground in flexible workspace: Savills launched Workthere, Blackstone bought a majority stake in The Office Group, and British Land set up Storey.