Written by Mike Kriel, CEO of Launch Workplaces
When I talk to building owners, I ask a simple question: Why don’t you have flexible space in your building? I’ve been doing this long enough that the answers start to sound familiar.
Six of them come up over and over.
I’m not writing this to argue anyone out of their position. Every owner I talk to is different. You have your own perspective, your own circumstances, and your own reasons for running your building the way you do.
What I want is to get these six reasons out in the open so we can talk about them honestly.
So, here they are.
1. The capital stack won’t allow it
This is the one I hear first. You have debt at the bank, and your lender won’t underwrite coworking.
2. Partner risk
Your capital stack might have more than just debt in it.
You could have equity partners, and those partners might not want to touch flexible space for their own reasons.
Maybe they’ve been burned somewhere else. Maybe it doesn’t fit their strategy.
Whatever the reason, if the people you answer to aren’t on board, that’s a viable obstacle.
3. Financial risk
This one comes up a lot, and I get it.
You don’t want to sign a ten-year deal where you feel like you’re carrying the entire financial burden with no guaranteed outcome.
That’s a fair concern.
What I will say is that flex agreements do not have to be decade-long commitments.
There are shorter structures with off-ramps and extension options that shift how the risk gets shared.
If the length of the deal is your hesitation, that’s worth a longer conversation, because the market has more flexibility here than most owners realize.
4. You’re holding out for the prime deal
Maybe there’s some optimism in the office market where you are. Maybe you’ve seen a few good deals nearby.
Somebody took twenty thousand feet down the street, or your building is getting tours, and you would rather hang on for a prime traditional tenant than commit space to flex.
I understand the instinct. If you believe a better deal is coming, you wait for it. The question is how long you’re willing to wait, and what that vacancy is costing you while you do.
5. You’re not sure you understand it
Some owners tell me they just don’t know enough about flex to make the call. I have some sympathy for that, but only some.
If you wanted to understand it, the resources are out there.
You can study it, learn how the deals work, and see who the credible operators are. I put a lot of that information out myself.
So, if this is your reason, the fix is in your hands. Learn the model, look at who’s doing it well, and make an informed decision instead of a hesitant one.
6. You got burned in the past
Maybe you tried a coworking operation years ago, and it went badly.
Wrong partner, wrong agreement, and a bad outcome, and now you have a “fool me once” type of attitude.
Fair enough. Nothing makes you cautious faster than getting burned.
There’s a real uptick in our business right now, and part of me is surprised that owners aren’t beating down every operator’s door.
If you want to learn more about how great operators approach management agreements or what you should look for when exploring flexible office space for your building, start with the Commercial Landlord’s Guide.
And if you are not already watching, Flex in Five on YouTube is where I break down one landlord question at a time.
