Covid has forced tenants to rethink office space usage, leading to an increase in vacancies. As subleases and new construction hit the market, rates are falling and demand for new master leases is tepid at best.
When will the market return to its pre-pandemic occupancy rates? Everyone has an opinion, but no one really knows.
However, it is certain that Covid has accelerated the trend towards flexible shared office space. Shorter term leases combined with multiple amenities has gained even more traction.
Fortunately for office property owners, a company called LocalWorks.us is converting vacant second generation suites into revenue in just thirty days. Using what LocalWorks calls its Space-as-a-Service platform, property owners, with little or no investment, can rapidly convert vacant space into a shared office suite.
LocalWorks operates all aspects of the business, from marketing the space to managing the day-to-day operations and collecting payments.
“The company really makes it easy for the property owner. While we were familiar with coworking and flex space, we had no serious intentions of launching our own operation, even though we had space available. In less than five months, LocalWorks filled the space for us. We’re now at 90% of desired gross revenue with zero tenant improvement on our behalf,” said David Smith, Managing Partner at Woodmont Properties, which owns 31 properties in the Washington DC metropolitan area.
“They’ve done such a good job, we’re having them expand to additional vacancies in our portfolio,” said Smith.
LocalWorks has added 19 locations in just the past nine months across five states including Maryland, Virginia, Illinois and Massachusetts. Because they handle the majority of operations (support and sales) remotely, the company has the ability to add locations rapidly. As a result they plan to expand nationally in the next year.
“Our goal is to help both property owners and small businesses meet more easily by offering a monthly private office rental product. In the past, owners have been reluctant to manage more than one tenant in a suite. Additionally, short term leases are considered a non-starter.
However, there is a massive audience in the market seeking exactly that type of product, and through our online advertising and data mining capabilities, we are able to find these renters,” said Barry Greenfield, CEO of LocalWorks.