Written by Mike Kriel, CEO of Launch Workplaces
You open your inbox, and there it is. A letter from a national coworking operator saying your building has huge potential for flexible office success. In fact, it could well just be their best location on the planet.
They’re thrilled. They can’t wait to meet you.
So, you gather your team and start asking the obvious questions.
Why us? Why now? What decisions do we need to make?
Good instinct.
Because, as flattering as that letter might be, what you do next matters a lot more than the letter itself.
Here’s my advice.
Treat It Like Any Other Vendor Relationship
If you got a letter from a cleaning company saying they were the best in the business, you wouldn’t just hand them the keys. You’d interview them, talk to other building owners, and check references.
Same thing here. Except the stakes are higher.
This isn’t a service contract you can unwind in 30 days.
It’s a partnership that’s going to shape tenant experience, building identity, and your bottom line.
So, it deserves at least the same scrutiny you’d give a cleaning company.
Probably more.
Take Them to Task and Make Them Show Their Homework
Bring that operator in. Thank them for reaching out. And then ask one question:
“How did you determine that my building is a great location?”
A credible operator should be able to walk you through a real underwriting and due diligence process.
They should know what other coworking operators are in the area and how those operators are performing. They should also have a read on the competitive landscape.
Beyond that, they should be able to tell you what makes your building specifically compelling.
Maybe you’re the last Class A building in the submarket. Maybe your amenity package sets you apart. Maybe the tenant mix creates natural demand for flex.
Whatever it is, they should be able to articulate it with specifics, not generalities.
And they should have at least an initial pro forma.
They should have a sense of the capital required to get the partnership off the ground and what the financial performance could look like.
Lack of Due Diligence = Huge Red Flag
If they can’t produce any of that homework from the last section, that’s a massive red flag, in my opinion.
If the answer to “why my building?” is essentially “we just think it’s good?”
Another red flag.
I’ve got to be honest. There are still operators out there who are more focused on racking up locations than making each one successful.
They search CoStar, fire off a letter, and move on.
They’re collecting pins on a map.
One successful location is worth more than 10, 20, or 100 that don’t perform. If an operator hasn’t done the homework to understand why your building works, I don’t think you take the conversation much further.
Don’t Make a Decision After One Conversation or One Operator
Even if that first operator impresses you, don’t stop there.
Reach out to other operators. Have the same conversations. Let them do the same homework on your building.
This does two things.
First, you get to compare the quality and depth of each operator’s due diligence. Who did real research, and who’s winging it?
Second, you get a feel for the people behind the business. You learn who’s local versus who’s flying people in from out of town for meetings. You figure out whose culture and operating style match yours.
Don’t overlook that.
Cultural fit matters more than people think in these partnerships. You’re going to be working closely with this operator. If their values and communication style don’t match how you run your building, that’s a problem you’re going to feel every day.
Getting a letter from a coworking operator is a good sign. It means your building is on someone’s radar.
But a letter is just a starting point.
Do your homework the same way you’d expect them to do theirs. Interview multiple operators. Ask hard questions. Compare the depth of their research and the quality of their people.
The right partnership can be a serious value-add to your building. The wrong one can be a headache you’re stuck with for years.
Take the time to get it right.
If you’d like to learn more about how to decide whether coworking is right for your building and how to pick the ideal partner, download our free ebook, The Commercial Landlord’s Guide to Flexible Office Space, or check out my Flex in Five series on YouTube.
And if you want to talk more in-depth, contact me today. I’d be happy to speak with you.
