221. Josh White on Leveraging Owned Assets and Operational Expertise to Create a “Building Services” Platform

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221. Josh White on Leveraging Owned Assets and Operational Expertise to Create a “Building Services” Platform

00:00:01 Welcome to the everything coworking podcast, where you learn what you need to know about how the world wants to work. And now your host coworking space owner and trend expert, Jamie Russo. Welcome to the everything co-working podcast. This is your host, Jamie Russo. I love today's episode. Once again, we have two guests, although I'm kind of like a side guest in this one,

00:00:40 Mike Abrams reached out and said, Hey, Josh white has a really interesting story. Let's do an interview with him. And I said, well, you know the most about his story. So you write the questions and do the interview, which he basically did, which I loved, but I love to, you know, be able to sneak in my questions when I want to know more about something.

00:01:00 So a big thank you to Mike for hosting this interview and to Josh, for joining us, speaking of Mike. So if you are a listener of the podcast, you know that Mike Abrams and I run a management agreement course, and we just started a cohort in a couple of weeks ago. We'll do our next one in January. So stay tuned for that.

00:01:21 But Mike and I are both speaking at an upcoming conference together while we're not speaking together. I'm speaking of doing part of the keynote. And then Mike is doing a session on creative partnerships, management agreements, et cetera. And that conference is flex world 2021. It's officer Andy's first ever virtual conference. I know lots of you are officer Andy users out there.

00:01:48 Lots of my members are so I'm excited to join them. They have a fantastic team and put out some great content. So they're hosting flux world 2021 on August 21st. You can register by going to flex world dot I O it's totally free. They have a flex track focused on flex and co-working space industry covering hot topics, including management agreements with landlords. And you'll see my Gabriel's in that session demand generation,

00:02:18 which we can never get enough of. And more they're also running a hybrid track focused on sort of corporate users that are trying to figure out how to return to the office. So if you want to join us, I'm sure it'll be a great community. They're using a cool platform that I think will make room for some great engagement again, flex world.io.

00:02:40 Okay. So back to Josh white and Michael Abrams, Josh is the managing director at MRP Realty. So they are an asset owner and they launched their own flex office coworking brand called make offices. And I'm sure in the interview, Josh says, when that was, I don't have it in my notes. And over time, MRP expanded that brand into non owned assets,

00:03:08 which presented some challenges and was not really allowing them to do what they wanted to do in the business. So after several years of learning and a global pandemic and a significant evolution in what tenants have want from their office space, they relaunched a more inclusive building services platform under the moniker heyday properties. So I actually really liked this episode of, of all my episodes,

00:03:35 but it's kind of a mix of like bigger picture, like strategy about what's happening today in commercial office. And Josh gets into some details about how they run the spaces and what's unique about their ability to control the asset and the flexible business inside of it and how they leverage building staff and other folks that are on that asset management team to also run the flex space.

00:04:04 So it's really interesting from a couple of different perspectives. So I will let you get into it, enjoy the show. Welcome. We have two guests today, Michael Abrams and Josh white. So Michael has been with us several times, Michael and I are collaborating on a course to help folks understand how to negotiate and create management agreements and other creative coworking partnerships.

00:04:32 Josh white is a guest today. I met Josh through the GWA, Josh. I think we may be coerced you to speak, and then we wrangled you onto the advisory board. So, but I'm looking forward to our conversation today. Josh is the managing director at MRP Realty, and he's going to talk about their heyday property services platform. Michael has teed up some questions to ask Josh about their experience and some forward-looking sort of plans around flexible office.

00:05:05 So we're going to dive right in Michael, I'm going to hand the microphone over to you. I'll let you start. And both of you give a little more context for an intro if you'd like, as you begin. Sure, sure. Thanks Jamie. And thank you Josh for taking the time. So MRP Realty has been, I guess, in,

00:05:29 in my view as an outsider, they've been slightly ahead of the curve with innovation, creativity from office buildings to industrial. They're mainly focused on the east coast, I believe. Is that correct, Josh? Yeah, that's correct. I, I, you know, if you look at across our portfolio, including industrial, that we span from new England down with,

00:05:57 with our recent focus in the Southeast and the Sunbelt. And so we're in Nashville and some large developments early looking at the Charlotte and Raleigh markets that we like as well. Right? Right. Well, from, from an outsider, they are very well-respected and most of their projects I'd say actually, maybe all of their projects, there's, there's this great energy and synergy that they create and they do quite well.

00:06:26 So with that, and with this emergence of flex and hospitality in the office market many years ago, was this vision to create its own brand called make opposites. So, you know, I always try to learn and we try to get folks like yourself to teach us, you know, what was the vision? What was the early on objectives? You know,

00:06:58 what's interesting is when I started the business in flex, I came out of, of a real estate company, very similar, but we had a different approach. And I think because of MRPs size and scale, I think, you know, we can learn from that expertise about, you know, what you've learned and the trial and error process that goes along with it.

00:07:26 So I'd love to know just, you know, the, the origins and how it was created, why it was created, who was your target user and that kind of stuff. So th the journey with MRP and flexible office, the initial exposure was very akin to, of what all of our members probably start out. And we were actually renovating, we were renovating our offices and we all moved into a make offices and instantly what appeals to so many in co-worker coworking,

00:08:00 especially sort of the early days of the startup culture, single shingle businesses, entrepreneurs, just the excitement and the energy that sort of happened and, and in the hallways. And so that was our first introduction into it. And it led to a investment in, in, in make offices. And so that's how we kind of came to eventually through additional rounds of investment,

00:08:26 have operating control of make offices. I served as a role there. And a lot of that capital that we put up for the business went towards expansion and took make offices to, to 15 locations. And then I think from a trial and error error standpoint that, that you mentioned, we've had, you know, we've had a change in thinking we are still a really long coworking flexible office.

00:08:54 We feel that that segment of the market as is predicted will continue to grow where it fits in the asset. We are always looking to put flexible office in the asset, be it traditional coworking or spec suite programs that are serviced and amenitized and pre furnished. So now we've kind of fallen back to a position and it's coincided with the pandemic that we just want to operate with in assets we manage and or own that we're a capital partner on that we're repositioning.

00:09:26 So that means a couple of the old make offices have come under our new portfolio, but we transitioned a lot of the others either reassigned the sand or transitioned them to other operators where we have been in arrangements where we were attending. Right. Right. So, so when make offices is in an MRP reality building, even though they are separate, what does that structure look like?

00:09:56 Is that a lease? Is it a hybrid? Is it a partnership? How do, how do the two entities do business together? Yes. They're there their partnerships, but the details of each arrangement are, are different and, and, you know, to comply with REITs and things like that. But essentially they are management agreements, but they can have,

00:10:20 you know, they can have the, the, the look of a shopping mall or a parking type of lease to, for, for re compliance. But we are working to, in conjunction with asset ownership and the landlords to, to fund the operating expense. And then there's typically some short of share and revenues beyond that. Right, right, right.

00:10:43 That's, you know, describe at a very high level. Right. Right. So, so w you know, when you guys were expanding outside of your portfolio, that, and that's a huge jump for any, for any group as, as you know, we're where your deals outside of your portfolio in a similar light, or where you having to sign actual traditional leases During that expansion period,

00:11:14 we were signing leases. So those locations that transition to new operators kind of at the beginning of 2020 had, had been taken up as leases by make offices. Right. Right. And so, you know, cause that's that rent, arbitrage game is so volatile, even, even in a good climate, much less having to deal with a pandemic. You know,

00:11:48 I mean, it there's so much learning experience by to go through that turmoil and stress, like, you know, w what would you highlight? What would you tell people to look out for? Yeah. So I think any, and this was predicted, right. I think there are a lot of people who were, we're waiting for that first down tear in the pressure test.

00:12:16 Oh yeah. The co-working model under a lease on this. And, and so we saw that we w we, we got that pretty quickly. And I think that people asking those questions were, were, were right, and that you cannot have your single market-leading feature and benefit being flexibility. You know, your primary selling point then becomes your, your primary weakness very,

00:12:48 very quickly. And that's, and that's obviously what, what happened. And so that's why you've seen a pendulum swing to management agreements, better alignment, both on upside and downside that I think happened, you know, having, I don't think that it what's interesting is I don't think that the pandemic and what has happened to revenues due to sort of a flight from,

00:13:20 from, from coworking for a period of time has, has impacted the reputation of, of as a office product segment. And in fact, I think it's, it's right now, we're going through the opposite of that. And that's because yes, it's the first segment of the office market to feel the flight because of the flexibility that, that is its selling point,

00:13:47 but it's also becoming the first to feel the return. And, and yeah, and, and, and we're in the, in the midst of that, I think in local markets, we're in, I mean, may June and the first two weeks of July, we're just, you know, we're, we're, we were on fire. I, I think sentiment due to like variants and,

00:14:09 and returns of restrictions has dampened that, that positivity and return to office, some things have been put on hold, things like that, but we flexible office was absolutely the, where everyone was returning to that. So, yeah. Hey, I just wanted to jump in really quickly before we continue with our discussion. If you're working on opening a coworking space,

00:14:37 I want to invite you to join me for my free masterclass three behind the scenes secrets to opening a coworking space. If you're working on opening a coworking space, I want to share the three decisions that I've seen successful operators make when they're creating their coworking business. The masterclass is totally free. It's about an hour and includes some Q and a. If you'd like to join me,

00:15:00 you can register@everythingcoworking.com forward slash masterclass. If you already have a coworking space, I want to make sure you know, about community manager, university, community manager, university is a training and development platform for community managers. And it can be for owner-operators. It has content training resources, templates from day one to general manager. The platform includes mini courses that cover the major buckets of the community manager role from community management,

00:15:32 operations, sales, and marketing, finance, and leadership. The content is laid out in a graduated learning path. So the community manager can identify what content is most relevant to them, depending on their experience and kind of jump in from there. We provide a live brand new training every single month for the community manager group. We also host a live Q and a call every single month so that the community managers can work through any challenges that they're having or opportunities get ideas from other community managers build their own peer network.

00:16:08 We also have a private slack group for the group. So if you're interested in learning more, you can go to everything. coworking.com forward slash community manager. Michael, can I begin with a up question? Sure. Gosh, you've mentioned in our pre-chat you kind of talking about circular value creation within a building and how, you know, you mentioned sort of asset build out,

00:16:32 you know, market fit in, so in your new product, and I'd love for you to describe what that looks like and talking about circular value creation within a building, is the flex always there to turn a profit or is there another sort of ROI for that business? Yeah, so, so circular value creation, sort of reciprocal value creation. That's,

00:16:59 that's what we talk about when we have this perfect sort of product office product fit to, to the asset and the sub market. So it's really feeding off the demand and the office environments in the coworking and, and spec, suite floors fit, what tenants are coming to that building for. So you don't have kind of a company culture or, or company lifespan disconnect where all of your gig workers and startups are going to the co-working floor,

00:17:30 but then you've got your, you know, your law firms and your consultants going to go into the rest of the building. If you want integration, if you want value creation, we see the need, all those things to fit. What we see when we can get it firing on all cylinders and get that to work is, and just kind of just for simple math and 100 square foot,

00:17:49 a hundred thousand square foot asset, we will see in a year graduating from co-working either into spec suites or traditional office between 7,000 and 10,000 square feet. So we're kind of co-working is a launching pad on bat circle, feeding the other types of longer-term office product. And then coming back the other way, for various reasons, they're renovating, they're expanding their in office size.

00:18:12 They're waiting for, you know, space to, to, to come back on the market within the building, we see about 15 to 20% of the co-working occupancy being taken up by the other tenants in the building. And so in the lab, the second half of that question, yes, it's it's for a profit. We, we do see it as an amenity,

00:18:38 but it still does need to stand on its own and, and, and turn a profit. And like, I think most out there we are looking for it to deliver at, at a minimum market rent at a stabilized occupancy. Right. And, and, you know, with your portfolio, you do attract a lot of big national tenants. Do you find today because of everything we've seen with the acceleration of flex our tenant,

00:19:11 our potential tenants asking for flex before they make a commitment to the building. So yes, we are absolutely seeing that more and more requirements for flexible components in the building. And so I think as that comes, I believe that Europe, and especially the UK have been sort of a leading edge of that. We probably two years ago, we started to hear about that being baked in as a requirement to more,

00:19:45 to more often, you know, you know, searches for companies out on the market for office space. So they see that as a sort of a built-in valve to expand into and th and things like that. So it's certainly seen as an amenity, we have, we're repositioning an asset right now where we're chasing a very, very large tenant user who has that requirement and the building doesn't have flexible office right now,

00:20:09 but it allows us to sort of collaborate on what that space is going to look like for them. And so they say, they've got a requirement of having flexible office in the building. We say, Hey, we're going to build this out, contingent on going to lease with you all. And we will, we will take your feedback and the, in the design of that space.

00:20:28 Right. That's awesome. So, you know, we've come full circle. You, you know, from make offices to heyday properties, you guys are out there. You're very, very active. Like if, if you could look into that ball, like where do you see this demand going in the future? Because you know, so many groups today,

00:20:57 they're looking at the enterprise groups. And as we discussed before we got on, on this call, we, we, you know, we talk about how, you know, the backbone of America's on small companies. So how can, you know, are we looking to satisfy everybody? Are we just going to focus on one subset? Yeah. It's a very thought provoking question.

00:21:25 I'll go to the, kind of the first part, which is so crystal ball kind of where, where we see things. I think we're in a period of increased demand, a bolus, a demand for flexible products. I think that the driving force behind that is just uncertainty and mostly in like employee driven, uncertainty, head counts, workstation counts, things like that.

00:21:54 How would we we've, we've, we've always thrown around the term future of work, but we're actually kind of staring at this, this period, like everything beyond this period is actually like, kind of like a new Dawn, right. For how working in the future. Yes we are where you have Tozer. And so I think the demand is mostly being driven by the desire to buy time,

00:22:18 kind of kick the can for a while, without signing up and making too, too long of a commitment on space, because you talk to these decision makers and yes, they're serving their employees about who wants to come to work, how often these sorts of things, and that data is moving right. Just as sentiment around the country, consumer sentiment, all these sentiments changing at the,

00:22:42 at the whisper of a new variant or the increase of, of infection rate and positivity rate in certain periods. And we, we feel that we're almost like canaries because of the flexibility that, that a lot of our membership has at least within our coworking floors. So I think these decision-makers, the last thing they want to do is sign it for 10 years and width on that either too small or too big.

00:23:06 And so a lot of new business won over the last four or five months. And we're seeing it play out on a monthly basis are those that have wanted to equip themselves with the ability to expand and contract as their employees either grow in confidence and wanting to come back to an office environment or all of a sudden the next month, again, I said,

00:23:26 mention of a new variant or something like that decide they don't want to, so they can shed and, or add seats monthly. And we're seeing that right now. Thank goodness right now, it's all on the positive, our spec suite programs, which we'll do 12 month terms on are, have absolutely been within, across our portfolio. One of the most in demand sort of office types,

00:23:49 the pre furnished pre-wired service. But again, I think that this is to buy time, to have better line of sight to what that ex office was going to be. And I think, you know, if I, if I had to, if I had to guess, I think in the next 24 to 36 months, we'll start to see longer term commence back into the seven to 10 year term lacks.

00:24:20 I'm not sure if it's going to be on a consolidated basis kind of pre pandemic square-footage footprints, because I think workstations will be down, but I'm not sure overall space needs will be down because you hear a lot talking about team rooms, collaboration rooms, Hey, if this is only coming in once a week, while they still all 10 of them need to be there and things like that.

00:24:43 So I don't, I can't sort of predict that. I think that the environments in terms of workstations and open desks seating and all that's going to change, right. And again, we do see that because a lot of our members where they would just take private office, private office, private office are now taking a private office and a room for a team room and our room for a conference room,

00:25:07 even though they can go into the shared conference room. So you're actually seeing a lot of, you know, a lot of tenants taking down multiple offices, but repurposes them for separate uses. Right, right. So, so here here's, here's something interesting and we all observed this with the pandemic, other than members fleeing, there was such a difference between urban core centers and suburban locations.

00:25:38 And like, you know, you, you just, you, you're not, we're not reading a lot about this differentiation, but for those of us that are in the business, we've seen just huge ups and downs with suburban locations versus urban centers. How, what, what's your view on that? I'm not sure I have a strong view, but I'll tell you what our observations were.

00:26:06 And that was absolutely with during the pandemic. So pre kind of vaccine availability, we felt that suburban locations or sort of edge, edge urban maintain the best occupancy levels. And, and our belief around that was, it was from a, it's a mode of transportation they're most often served by surface parking and they're much less likely to be access via bus or Metro,

00:26:36 which there's a, you know, a lot of apprehension about, right? So that, that's the belief that we thought around there in terms of a return though, we're seeing much better return and releasing in central business district locations. And again, that's more of like a socioeconomic slash demographic belief. There is in that those, those edge slash suburban, you know,

00:27:06 more single family homes, therefore more likely to have a home office, more kids. So they're waiting for kids to go back to school and things like that. Whereas central business district, more multifamily, more and more dense, residential, less likely to have a home office, more likely to want to get back and collaborate and be amongst their peers and things like that from a social set standpoint.

00:27:27 So those are the two things we've seen at play. That's great. Hey, I wanted to just interrupt Josh, can you just kind of give us an overview of what the heyday model is like? Because we started talking about make offices and heyday is a full building solution, which is still somewhat unique and flex. I'd love to hear and very hospitality focused and Yeah,

00:27:54 so absolutely. So, so MRP kind of the reputation and hallmark, at least in the, in the commercial and our commercial division and office did they is, is, is repositioning, right? Working with capital partners to develop a new story and strategy to, to improve an asset, improve leasing, velocity and rates and things like that. And property management,

00:28:20 we feel as a tool and repositioning as is as flexible office and, and amenities. It's not just the rooftop, the gym and redoing the lobby. It's, it's, it's adding other things. It's adding a lot of times a differentiated property management, which is heyday. And I think, you know, when we talk about how hospitality or differentiation or experiential,

00:28:41 you know, I want to get, give the credit to the team that developed that because it was sort of re-engineered they spent time with the Ritz group. They spent time with, you know, the, the brands out there that you believe are hospitality. So this isn't just lip service or checking a box or dropping words like hospitality into do a deck.

00:29:04 Right. You feel it. And it was engineered from the experience from dropping off your car, how you enter the parking garage. I mean, it was just absolutely, you know, soup to nuts re-engineered and that's what heyday is. And a is proven by technology. A lot of it's driven by design and a lot of driven by the amenities that are in there.

00:29:28 And so that's what, what heyday is. And so coworking and flexible office tight, you know, office products are with our, within hating. We operate them in traditional non-differentiated property management, but also in the, in the different and the D in the hay, in a heyday managed asset. So that's one unique thing. The other unique thing is,

00:29:52 although I think we're going to see more and more of this is that operations of the flexible office. So when I talk about operations, I mean, sales, marketing, touring negotiation, servicing day-to-day handled in an integrated fashion to property management. And so the economics of that model are very, very different than it's really a self operated model. It really is.

00:30:21 So you leverage economies of scale and things like your janitorial service, your security, you know, they all think things like that. And so it's a very, very ownership, friendly model. As long as the group that's managing it has flex experience. And so we've just seen it as being way, way more profitable for ownership to allow the third party operators out there.

00:30:56 There's some great ones out there, but I think across the board, that can be, it can be very beneficial and it gives, see something that, you know, owners should, should consider. That's great. No, that, I mean, there's, there's a clear path and vision in the future, teaming up flex with technology and design. I mean,

00:31:17 you, you, you hit the nail on the head, I guess at the end of the day, while we talk about it a lot, the one thing that we all have learned is it takes a lot of capital. It takes a lot of time. It takes a lot of effort. So many landlords took this lackadaisical attitude toward flex thinking that you just put up specs weights,

00:31:43 and at least as an themselves, we've all learned through this experience. It's, it's not as easy having watched MRP. We've also seen some other great landlords like Heinz and Tishman Spire and even Brookfield, everyone's testing it out. I think, you know, you guys, obviously you've learned a great deal. You reorganized you restructured. I think it's, it's a compliment to you guys seeing value and reorganizing in a manner that you only come out stronger and better.

00:32:31 I mean, it just, it speaks, it speaks volumes for itself. So now that you're within your portfolio, I know you make, make offices at one time was up to 15. How many buildings within your portfolio are you now offering flex? Yeah. So there are 11 flexible or locations with flexible assets in it. And that can be either our coworking or it can be our,

00:33:05 one of our spec suite programs, town hall is one of them that, you know, we're kind of known here at least locally in the DC market for town hall, which was kind of pioneering at the time was created, you know, five or six years ago by MRP and really what it is. It's a natural kind of graduation or extension from,

00:33:25 from coworking. What you do is private office suites, the office suites have small huddle rooms or conference rooms and management offices, and usually a kitchen like a spec suite would have, but it's all wrapped around a central core of amenities, like find in coworking. So there's large conference rooms in there. There's large event space, there's a large kitchen area for entertaining and things like that.

00:33:48 Rooftops balconies, all of that. And so that, that product has done has been great. You know, this location I'm in right now, you know, go back to that circular location. We've delivered various things as part of this repositioning of 2010, the food hall has opened and is slowly opening the flexible office. The coworking was delivered the spec suites.

00:34:13 Haven't, we've got white space, white box space behind me that, you know, some spec suites are going to go into four of them are going to go up here. They're going to be a lot more down in fourth and fifth floor. I'm up on the 10th floor right now, which is the top floor. There is a waitlist from the coworking floor for these four suites of this great seven deep right now.

00:34:34 We haven't even, you know, we haven't even had the plans approved. So that's another aspect of asset value creation and how the asset and ownership benefits from flexible office. But it also takes that product fit that we've talked about because the environments match, right. The type of client and member that's going to go down that, that coworking for can see themselves up in here or in the traditional office space.

00:35:03 No, you, you, you, you just said that those special words, organic growth increases margins and makes every stakeholder very, very happy around the boardroom. Yeah. Well, we've got a stretch goal that, that we do 20% of our deals outside of co-working direct in an asset. So that's either a and what, and how, what we would define as direct is graduating out of coworking or in,

00:35:37 through the digital marketing of coworking and end Zana. Right, right, right. Which, you know, you hit on something else right there that we didn't discuss, which is how are you getting your leads? How are you getting your members versus the tenants, which is a total divergent from, from the old way of thinking, because now we're all into this technology and the analytics,

00:36:03 I guess you have the benefit of getting it from wherever you can. You're getting it from different sources. Yeah. I assume, I assume you're still employing the, the lead generation through Google analytics, But yeah. Yeah. So, so all the traditional digital marketing tactics that we did as, as, as mega offices were, we're doing now, and then some,

00:36:33 so one thing and kind of surveying the market and going back and, and, and recapturing from a data driven or analytical driven analytically driven way, the conversations we're having with members, we believe that there is a, an opportunity in the market to be more kind of consulted Tori to, to these leads. And so in the near future, we're going to be kind of rolling out a new brand that is to do that because we've got a lot of people come to us thinking they want coworking,

00:37:07 but really wanting private space. Or we have people that come and tour space and being like, ah, this isn't what I was looking for. And we kind of word mapped a lot of those conversations recently. And it, it, it, it may, it brought us to the realization that we can actually be a service on the intake of a lead that's looking for space or signs up for a tour that pre tour,

00:37:32 which we've always done. We've always done a really good job of sort of, of that intake conversation, but taking it to the next level of, okay, do you have line of sight to, to ha to where you're going to be 12 months from now, what's confidence level around term, how important is privacy? How important is amenities? You know,

00:37:51 all, all of those things. And that's just a, you know, a small sample of the kind of questions and the conversations that we're having. And so that allows us to really place them in just a ready now spec suite, that it doesn't have the amenities because, you know, elevator exposure, elevator bank exposure is not that important or something like that.

00:38:10 Right. Or, Hey, you know what, we're a second third generation family services company. We know exactly how much space we're going to need expansion adjacent to us, or within the asset is not important. We can kind of tease all that out. So that will be coming pretty soon. We're, we're, we're excited about that. And then each of our products will sort of sit under that umbrella consultatory service.

00:38:34 And that way we can kind of place them in the right product type. And, and really the objective is the most efficient capital expenditure on real estate in any metric that they, you know, that they, that they track, whether it's, you know, per workstation, per employee, per, per what is, what we'll, we'll drive, we want to arm them with,

00:38:55 with the efficiency of those dollars spent and put them in the right space. And Josh will, those con those conversations would be had regardless of lead source. So broker digital, like, will they funnel into, and then who has that conversation? Is it a broker? Is it the leasing agent? Like, who is that? Yeah, so that's,

00:39:15 that's us. So that's sometimes that's that's myself and it's the, kind of the, the commercial team that, that, that sits on, on heyday and our flexible office. So sometimes it's actually our asset managers early on having those conversations. We're evangelizing a lot right now spreading the gospel of flexible office. Yeah. That's another interesting thing we see, we haven't touched on that with seeing the pan.

00:39:40 Now we've absolutely seen an increase in broker led deals. I just mentioned before that our stretch goal is to see 20 to 25% direct non broker because we're graduating them up and, or they're coming through our website and we're realizing that, you know, traditional office and, or, you know, spec suites are the right, are the right fit for them for various reasons.

00:40:02 But I we've, we've seen a significant increase in, in, in broker deals as well. And I can I fall back on old Mac office data. It was maybe 10% were, were brokered. So the, the, the other 90% were either friends and family of, of existing members, or they were coming through digital marketing demand gen. Right.

00:40:25 But now we've seen that's up to 30, 35% brokered. I think that's because requirements that were out in the market have now struck down to something that's either more coworking. And it goes back to what we're saying before, you know what they need to wait it out and they need to wait it out. And in a, in a situation that is the month or sort of short term,

00:40:47 short term time. So they're not tied to it for, for a long time. I also think there was probably financially driven as well. I think, you know, probably some broker commission dollars were driving up and they got a lot more creative than they ever did and said, Hey, well, you might not need the full 15,000 square feet, but what about this team that needs to be better?

00:41:04 Can we get them a 10 person office? I think there was probably some of that going on as well that we've seen. And it's also, you know, it's, it's also, cause I've had, I've had these talks. They want to make sure that when it's time to move back into that 10 50,000, that they haven't lost them as a client because they found them,

00:41:23 they enter interim solution. So that's great. Michael, last question. No, I think we hit on judge. This was so informative. This is, this is great. I think just, you know, where you've been, how you reorganized to where you are, it just speaks volumes of Al you realized throughout the entire process where your focus is where your tenants,

00:41:56 you know, how you can satisfy your tenants objectives and use, you seem to be marrying the design aspects, that technology aspects, and probably more importantly than anything else is the hospitality aspects that you're introducing into the office environment. It, it not only speaks volumes to, as we say the future of work, but I think you're also finding what it does to value of an asset,

00:42:31 which at the end of the day, that's what you're trying to achieve. So, you know, th th this, this is great because, you know, you guys are DC-based and, you know, you've learned a great deal and you seem to be thriving on, you know, what you've learned and where and where you're going. No, I am.

00:42:54 I go, I appreciate that. And I think you, you opened up with describing MRP is a innovative company, and I'm, I'm lucky that they, they brought me on, you know, about three years ago. And that's absolutely a hallmark and reputation of this group, Zach Wade, who I know you both know Jamie and Michael and, and Alison Johnson who leads up our property management group,

00:43:14 who is, who is the creator, the architect of, of our heyday concept, and has, has that executed and brought it to market. But MRP is absolutely a visionary and innovative group. And I think that we are boutique and work at a, at a small scale, allows us to not trip up and taking that vision to, at, to an executable phase.

00:43:34 And so it's been, it's just been a really rewarding group to work with and fun to be part of. That's awesome. Well, Hey, we're glad you shared your experience with us By pleasure. Thanks. Thanks to you both. Hey there, thanks for sticking with us through the end of the episode, don't forget to subscribe on your favorite podcast player.

00:43:55 And if you were enjoying the podcast, please go leave us a review. It helps other folks find the podcast who are thinking about starting a coworking space or already operating a co-working space and are looking to stay up to speed on tips and trends. And we started a YouTube channel. We'd love to have you catch us on video. You can join us for podcast,

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