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co-working broker

Co-Working Is a New Type of Real Estate That Might Require a New Type of Broker

The beauty of co-working comes from its simplicity. Rather than negotiating lease tenants can just sign up for a flat-rate monthly fee. But as workspaces start to bundle more and more services into their offerings to include things like parking, meeting room usage, mail handling, events and wellness programs its is becoming clear that the negotiation process is going away, just shifting focus.

An Australian company called Office Hu has found a niche for its technology by helping both co-working tenants and managers come to terms. The founder and CEO Grant Philipp explained it this way: “By giving tenants and operators the same visibility that only agents have conventionally had, while standardizing proposals and opening channels of communication, our technology makes sure everyone is on a level playing field.”

They boast an average discount for prospective tenants that use their Abacus technology compared to those that don’t. “Average agreement value of AUD $12,000 using Abacus versus AUD $17,000 without,” Grant said. “It is important to note that over 50% of these deals were effectively lost over budget and revived due to the tenant’s ability to make an offer in Abacus which reflected the shift in market rates.”

How do they help co-working tenants negotiate a better rate? By promoting the same points that steer every tenant negotiation: longevity and creditworthiness. Grant told me, “Our technology connects via an API to several data enrichment platforms and credit agencies to build a tenant profile around their social online presence, work and education history, personal bios and avatars. Then it intelligently aligns the tenant’s requirements with the DNA of our workspace partners and the available spaces they have listed on Office Hub.” When workspaces are able to access information about the tenant and both parties have access to industry benchmarking it often leaves room for negotiation. Proposals, tours, offers and counter-offers are all done in the platform and license agreements written and vetted by Office Hub.

This third party intermediary role that Office Hub plays closely resembles the job of a traditional broker. But rather than adopting a “brokerage disruptor” mentality they aim to bring brokers into the process as time goes on and coworking deals get bigger. “As big companies continue to gravitate to flex workspace and as agreements become more complex, it will become necessary to allow for brokers in the digital process,” Grant predicted. “Our tech was developed with a third view for brokers and we envision rolling this out within the next two years, a move that we think will completely revolutionize commercial real estate.”

Everything is negotiable and it seems like a co-working lease is no different. It makes sense that since space is being offered as a service there will be varying customer costs. If the co-working industry is able to better understand the risks and expenses associated with every tenant that they should eventually be able to tailor their service offering to provide the best comparative value to tenants creating a rare example of a win-win in the zero sum game of lease negotiations.

Editor and Co-Founder

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