The HR Digest - - Content Features -

Burn­ers Turn Earn­ers.

‘Of­fice Space as a Ser­vice’ OR ‘Un­used Of­fice Space meets Lap­top En­tre­pre­neur’ OR ‘Be­yond the Board­room’

When Mal­colm Porter bought and ren­o­vated a Down­town Berke­ley of­fice build­ing to cre­ate a stu­dio for his ad agency, he re­al­ized the space was con­sid­er­ably huge. Rather than see­ing the space sit unuti­lized he sub­leased it.

“Iden­ti­fy­ing cre­ative ap­proaches to of­fice space can be a great way to save time and money,” Porter ex­plains.

So, when the owner of a five-per­son pack­ag­ing de­sign agency came look­ing for of­fice space, Porter agreed to share part of his stu­dio.

Un­oc­cu­pied of­fice parks, va­cant con­fer­ence rooms and empty desks are com­mon in busi­ness dis­tricts across the United States. Over the past 30 years, the U.S. has added roughly 2 bil­lion square feet of of­fice space to its ex­ist­ing pool, most of which to­day’s mo­bile work­force no longer needs.

The Amer­i­can land­scape is loaded with the mas­sive un­tapped man­made re­source known as ‘of­fice space.’ Things are chang­ing, at a grad­ual pace, but

mov­ing. A startup called Liq­uidspace has turned the hid­den re­serve called un­used of­fice space into a util­i­tar­ian re­source for the ever-ex­pand­ing shar­ing econ­omy. Liq­uidspace CEO Mark Gil­breath, 48, doesn’t have an of­fice all of his own; nor does his com­pany, which opened for busi­ness in 2011.

Liq­uidspace may sound like a ver­sion of Airbnb or Craigslist for of­fice; but it taps on the idea of den­si­fi­ca­tion – re­duc­ing foot­print per em­ployee. They don’t man­age the of­fice in­ven­tory them­selves, they sim­ply pro­vide a lo­ca­tion to con­nect of­fice seek­ers with ex­cess ca­pac­ity. But, it as­pires to be more than just an app-based clas­si­fied. The com­pany is try­ing to help en­ter­prise-level com­pa­nies lever­age un­used of­fice space both their own and ev­ery­one else’s.

For most com­pa­nies, of­fice space is the big­gest of­fice ex­pense. Un­for­tu­nately, most com­pa­nies waste a fair amount of their of­fice space. A re­cent In­tel sur­vey found that at any given time, 60% of cu­bi­cles and work­sta­tions and 77% of

ex­ec­u­tive of­fices are un­oc­cu­pied. Ad­di­tion­ally, most em­ploy­ees telecom­mute an av­er­age three days a week with the re­main­der spent in the off-site meet­ings or work­ing. By us­ing share space, In­tel hopes to house 20% more em­ploy­ees in the same space.

To study how peo­ple are us­ing the ex­ist­ing of­fice space is called “ac­tual use of space,” or AUS for short. An AUS data en­ables cor­po­rate man­agers to study how peo­ple use the of­fice and the equip­ment in it. If the of­fice space is be­ing used in­ef­fi­ciently, then the com­pany is go­ing to suf­fer. Stud­ies by the In­ter­na­tional Fa­cil­i­ties Man­age­ment As­so­ci­a­tion show that the av­er­age cost of pro­vid­ing a workspace to an em­ployee ranges be­tween $8,000 and $14,000 per year. If the av­er­age use of workspace is 50%, then the com­pany is wast­ing $4,000 t $7,000 per year for each workspace.

The rise of mo­bile work­force, self-em­ploy­ment and sky-high of­fice costs are fu­el­ing de­mand for shared of­fice space in busi­ness dis­tricts like Ca­nary Wharf in London, Fi­nan­cial District in Man­hat­tan and San Fran­cisco, and Beijing Cen­tral Busi­ness District in China. A hand­ful of com­pa­nies are rent­ing workspace by hour, sim­i­lar to the way Airbnb.

Vrumi, founded in 2011, has 5,000 reg­is­tered users and 120,000 square feet of rentable workspace across the U.K. Breather, a fouryear-old com­pany op­er­ates in the U.S. and

Canada. London-based Space­hop is bring­ing shar­ing econ­omy to the workspace mar­ket, where film­mak­ers, nov­el­ists, and en­trepreneurs sit down to work with other cre­ative peo­ple. With the ad­vent of the so-called shar­ing econ­omy, those who are look­ing for ex­tra cash are gen­er­at­ing in­come with the help of the in­ter­net and smart­phone apps. Space it­self has be­come a scarce com­mod­ity, with peo­ple rent­ing their drive­ways to com­muters search­ing for park­ing, gar­den plots to those who want to grow their own veg­eta­bles, and at­tics to apart­ment dwellers in need of stor­age.

Letmes­pace in Spain pro­vides a mar­ket­place to rent out any­thing from park­ing space to un­used stor­age. In Hong Kong, Box­ful helps you de­clut­ter your life by col­lect­ing and stor­ing un­needed be­long­ings. Pubs are rent­ing out space in the morn­ing to peo­ple look­ing for peace to work.

The Com­mer­cial Real Es­tate Com­pet­i­tive­ness Study, re­leased in the fi­nal weeks of New York City Mayor Michael Bloomberg’s ad­min­is­tra­tion in 2013, fore­warned that the higher-priced of­fice space in Man­hat­tan could cre­ate a short­age of space avail­able and af­ford­able to the city’s high-growth com­pa­nies. A 2015 CBRE anal­y­sis con­cluded that in tight sub­mar­kets for of­fice space, res­i­den­tial con­ver­sions could re­sult in losses of af­ford­able of­fice space in the U.K.

At the same time, a lot of of­fice space re­mains avail­able: 185 mil­lion square feet in the United States is no longer in use and ready for re­use, ac­cord­ing to the Na­tional As­so­ci­a­tion of Real Es­tate Man­agers. The good news is, a host of fac­tors are re­mak­ing of­fice space, in­clud­ing in­creases in telecom­mut­ing, as well as pref­er­ences for more flex­i­ble and col­lab­o­ra­tive spa­ces. The un­der­ly­ing fun­da­men­tals cer­tainly sug­gest that the need for flex­i­bil­ity, cost con­trol, and more col­lab­o­ra­tion will con­tinue, forc­ing com­pa­nies in the near term to im­ple­ment a va­ri­ety of mod­els to meet their needs with un­used or lim­ited space.

A lot of com­pa­nies are now ex­per­i­ment­ing with of­fice shar­ing among in­di­vid­u­als from non­com­pet­i­tive in­dus­tries. This ar­range­ment al­lows com­pa­nies to share some costs as well as an op­por­tu­nity for rank-and­file work­ers and ex­ec­u­tives to learn how com­pa­nies in other in­dus­tries op­er­ate.

Vir­tual com­pa­nies are try­ing to in­cor­po­rate col­lab­o­ra­tive ben­e­fits of on­site work by of­fer­ing em­ploy­ees the op­por­tu­nity to work in the same phys­i­cal space. For ex­am­ple, Au­to­matic pro­vides a monthly sub­sidy to team mem­bers who co-work as an in­cen­tive to col­lab­o­ra­tion.

Liq­uidspace has helped small star­tups, and it has found space for large, es­tab­lished com­pa­nies, in­clud­ing Ac­cen­ture, AT&T and Whole Foods. Some of these re­quests range from in­di­vid­ual desks to of­fice suits.

In the late 1980s, Ray Olden­burg coined the term Third Place, to de­scribe neu­tral, pub­lic spa­ces where pro­fes­sion­als can spent their free time work­ing on

per­sonal projects, so­cial­iz­ing, par­tic­i­pat­ing in com­mu­nity events, and more. By con­trast, the Sec­ond Place is workspace, where peo­ple col­lab­o­rate with team mem­bers, con­duct ma­jor­ity of their work, de­velop pro­fes­sional skills and more. The Third Place is nei­ther liv­ing quar­ters nor of­fice space, but pub­lic spa­ces where com­pa­nies rely on to in­crease pro­duc­tiv­ity, pro­fes­sional col­lab­o­ra­tion, and pro­vide op­por­tu­ni­ties for em­ploy­ees to tap in ex­pe­ri­ences, per­spec­tives and cul­tures.

To fa­cil­i­tate work in the Third Place, com­pa­nies are en­cour­ag­ing a flex­i­ble space model by rent­ing out un­used of­fice space, en­abling em­ploy­ees to work in from cof­fee shops (on the same floor) and cowork­ing spa­ces. At the same time, some com­pa­nies are build­ing unique spa­ces that mimic the com­forts of the Third Place en­vi­ron­ments, pro­vid­ing ad­di­tional op­por­tu­ni­ties for em­ploy­ees to get out from be­hind the cubes.

Other com­pa­nies are re­design­ing their ex­ist­ing, un­used workspace to of­fer far more con­ve­nient cowork­ing op­tions, as well as shar­ing ex­tra space with like-minded com­pa­nies from dif­fer­ent in­dus­tries, and in­tro­duc­ing an ad­di­tional monthly rev­enue stream. By lever­ag­ing plat­forms like Vrumi, Liq­uidspace, Space­hop and Letmes­pace, com­pa­nies and their em­ploy­ees can work with­out the has­sle of a tra­di­tional lease. Meet­ing rooms, cowork­ing space, shared workspace, ded­i­cated desks and more, are avail­able at the click of a but­ton. Com­pa­nies can cap­i­tal­ize on grow­ing in­ter­est sur­round­ing the Third Place model. Build out the ex­ist­ing frame­work and pro­vide em­ploy­ees with the in­cred­i­bly unique op­por­tu­nity to dis­cover and en­gage with lo­cal com­mu­ni­ties.

In the future, the mind­set of work­ing 8-5 in an out­dated cu­bi­cle will change as em­ploy­ees de­mand greater flex­i­bil­ity and as com­pa­nies be­gin to re­al­ize the ben­e­fits of op­ti­miz­ing the workspace. Over the next five to ten years, de­mand for prac­ti­cal of­fice so­lu­tions will con­tinue to in­crease and com­pa­nies will need to lever­age pow­er­ful plat­forms to suc­cess­fully meet the needs of an in­creas­ingly mo­bile work­force.

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