US Office market, a sleeping giant for the Serviced Office industry?
North America, with a national GDP of $14.3 trillion, is the biggest economy on the planet. This means that it is also the biggest office market on the planet. With serviced office space representing a tiny fraction of overall workspace globally, perhaps less then 5%, this is a massive opportunity for the industry. Despite the fact that there is likely to be serviced office space in every major US city, and perhaps even in the not so major ones, there is still I feel there is (as in the UK) a lack of understanding over what serviced offices actually are.
I will admit my hunch is based on non-scientific and anecdotal evidence, gathered from reading office news in the US and looking at the major UK office sites. Real estate companies tend to be more prominent than brokers, and most people tend to look for a lease with a view to renting conventional office space. It is logical that if people are pre determined to look for a conventional lease, then traditional real estate companies will flourish, with brokers and serviced providers having to penetrate the established model.
One of the most popular areas for advertising office space is on the classifieds sites. These seem very popular is the US, more so than in the UK. They are user friendly, and represent the antihesis of corporatism as the space advertised is usually for smaller offices, suiting start-up’s and SME’s. However, one thing you do notice is that advertisers will in the majority of cases specify cost per sq ft and lease information as opposed to cost per person. Pictures are of empty floors, meaning the space available is for conventional lease deals NOT serviced offices. Despite this, it is true to say that in a world where companies are demanding flexible and affordable office space, many of those browsing for office space would be better suited with serviced office space. And in fact, that is what they often will end up with.
The attraction of small start up costs, all inclusive monthly payments and flexibility has meant that the serviced model is tried and tested and can be exported anywhere where there is a demand for workspace. It is upto those with the deepest pockets and the industry at large to get the message over.