Small office space, both furnished and unfurnished, is performing well in the otherwise lackluster office market. Pioneered by Regus and newcomer wework, tenants can rent furnished or unfurnished office space for a day, week, month, or longer. The basic concept is that office building owners take large open floorplates and create individual “office suites,” typically 150-200 square feet (roughly 12 feet x 15 feet), which allow adequate space for a desk, chair(s) and storage. Some building owners provide the space unfurnished and some provide the space furnished (at a higher rental level). Most owners provide an array of shared amenities, which typically include conference rooms, break room, telephone, networking and internet services, as well as photocopying and scanning equipment.
The up-front cost to develop an “office suite” building is typically higher than a traditional open floorplate because of the additional walls, doors and internal wiring involved in the build-out. Furniture is an additional cost for developers who provide the suites furnished. Building owners are able to charge higher rent/square foot for office suites. One reason is the rent is typically quoted per week or per month, similar to a residential apartment, and although when converted to rent/square foot the amount looks high, on a rent/month basis, the rent is appealing. For example, the rent on a 180-square-foot furnished office suite in a suburban market in the southeast might be $600/month, which sounds quite reasonable, and it converts to $40/square foot, which is much higher than the $20/square foot charged for larger, traditional office space.
As larger corporations downsize their centralized office space and shift employees into “the field” to be closer to clients, the “office suite” niche should continue to grow.