I just spoke to one of my favorite managers in Orange County and she said that she has some terrific corner office suites available…in January! Her offices average $1000 per office that includes a phone system, T-1 internet and parking. Wait a minute, aren’t we in a recession? Every where I go, I see “Office Available”, or “Building for Sale”. So why does a high-priced executive suite business center has a 100% occupancy rate? Is this a fluke?
The fact is, there are many business centers nationwide that have high occupancy rates. Having a high rate of 80% or more in occupancy is a norm in the Executive Suites industry. Think about the type of companies that does well in a recession. Discounters like Walmart and Target are thriving while other companies are laying off employees in order to survive. So, are Executive Suites the discounters of the Real Estate industry? No. As a matter of fact, on a per-square-feet basis, Executive Suites are more expensive than the traditional office. So why do Executive Suites do so well as a whole? There are quite a few reasons but the answer here is value. Think about the last time you went into a burger house. You can order a deluxe burger with all the trimmings for $3.95, a large fries for $1.99, and a large Coke for $1.79. Oh wait, let’s look at the combo meals to see if there are any value there. There it is, everything that you wanted for $5.95. Executive Suites, in essence, bundle the office and the services together like a value meal and charge you one price.
Let’s look at the normal services that are included in each office package. Services and packages differ for each business center, so make sure you talk to your center manager and ask her to explain to you everything that is included in your office “value meal”. For simplicity purposes, let’s look at the services found at most business centers.
- Reception services – think about how much you are paying a receptionist to answer your calls and meet-and-greet your clients. $10 per hour? In an Executive Suites, the meet-and-greet service is included in your office package, and personalized answering service is a measly $25-$100 per month extra. This service is worth every dime to have another person represent you and your company.
- Phones and voicemail – How much would you pay for At&T to install a business line at your office? What happens if your phone service is down, who will be there to get you back up? A phone system in an Executive Suites averages $50 a month, and if your phone goes down, someone is on it ASAP. Most business centers charge for long distance calls, so know what you are getting with your phone system so there are no surprises.
- Internet – The average price for internet in a business center is $50 per month. The speed varies, but typically it’s a T-1 line, more than adequate for your computer needs.
- Furniture – Not all Executive Suites include furniture in their office packages, so inquire to see if your office includes furniture. Sometimes, an office package is cheaper because it does not include furniture. You can benefit from this if you have your own furniture. Otherwise, there is a rental program that all business centers have. However, this is done usually through a third party and the prices can be high.
- Parking – does your center has parking fee? In Los Angeles, it’s difficult to get free parking. So budget the parking in with the office package to make sure you are getting the best deal. Parking fees range from free to $250/month in downtown LA.
- Conference rooms – Most business centers have conference rooms that will allow you to conduct team meetings and meet with clients. Check with your business center to see how much usage is included in your lease.
- Misc services that will benefit you and your business – Fax, beverage services, light secretarial duties, catering, networking, conference room usage, copy room services, concierge services are some that comes to mind. These services are either minimal monthly cost or charged per hour, depending on locations.