For many big coworking spaces, integrating broker firms into the sales strategy for their space is the norm. Yet for others, it’s unknown territory. Whilst brokers may have previously been associated with traditional offices, many coworking operators are now utilizing their capabilities to minimise vacancy rates. However, creating an effective relationship with a broker firm isn’t something that happens at the touch of a button; there are ways and means of ensuring the working relationship fully meets the needs of both parties. If you’re keen to achieve or maintain full occupancy of your coworking space and are thinking of working with brokers for the first time, here’s how, why and what’s next.
Bigger coworking spaces are particularly prone to establishing broker-relations in the early days of opening as the pressure to fill large volumes of space grows greater. When establishing a broker-operator relationship, is it built for the short-term or long-term? Is it typical to work with just 1 broker or multiple brokers? How is the commission fee negotiated, how are leads and enquiries streamlined and how much clarity is there over referrals? Whilst there are many ways in which brokers can work effectively with operators, operators can equally enhance working processes with brokers for their own benefit. From conducting the tour to signing the contract, how far do brokers go to understand coworking brands and how much responsibility do they take for qualifying and converting leads?
Sole or Multiple Brokers?
Working with one or multiple brokers is entirely the choice of the operator. Working with one allows more time to be dedicated to a single relationship, whereas working with multiple could increase the volume of leads. Another option is to assign brokers to certain projects. For example, Estates Gazette announced last month that WeWork has appointed Cushman & Wakefield to exclusively fill a building consisting of 110,000 sq ft.
Sarah Travers, Head of Business Development at Workbar states “we prefer to work with multiple broker firms due to the varied leads we receive; our space caters to different types and sizes of companies so this arrangement serves our needs. We don’t only rely on brokers for new leads, we also rely on them as experts for industry knowledge and market research.”
Short-term or Long-term Relationships?
The time invested in building broker relations will depend largely on the intention to maintain relationships for the long-term or short-term. Whilst some operators may use brokers to hit full occupancy upon launch, the vast majority benefit from long-term relationships.
Workbar emphasises “long-term relationships are always preferred. We want to help brokers add value to their client’s real estate portfolio which is a long-term commitment.” This sentiment is mirrored by brokers. Danny Babington, Senior Operator Relationships Manager at Instant Offices, states “coworking operators don’t tend to leave us unless they’re closing down. Even with tremendous success, no location stays full forever so we always endeavour to continue the relationship.” Jon Posener, Chief Operating Officer at Search Office Space, similarly states “The majority of deals we close with coworking operators tend to be longer term. This often suits all parties. The broker will be paid upfront for a longer deal, the operator will get certainty and the client gets certainty knowing their space won’t be let to another company.”
Posener further highlights how a year ago, coworking operators were largely pushing for monthly deals. However, this has recently changed. Short-term arrangements are less common and are typically saved for single requirements or to help get difficult deals over the line. In markets with high demand for space, launching is less of a concern; a good proportion of space is often sold at a good rate before opening.
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