Disrupting the Lease: Startups Build a Modern Solution for Office

Co-working offices are so 2017. The next real estate disruptor? The agile office economy.

While coworking gives young companies and entrepreneurs access to shared office spaces, the burgeoning agile office market caters to larger companies that don’t want shared office space. Instead, they seek flexible lease terms that let them grow and–if need be–shrink their footprint on demand, with custom services that alleviate the headaches of searching for, designing and running an office.

Call it headquarters as a service. At Knotel, we cater to companies with 50+ employees, offering them flexible, short-term leases that let them change the space they use — without penalties, surprise fees or hefty upfront deposits. Knotel’s team of designers individually create each company’s office space, and handle the many details involved with the office — from Internet and Ethernet to coffee machines, wall colors and furniture. Knotel also attaches office managers to every company that works with Knotel; the managers handle everything from staying on top of IT repairs to making sure employees constantly have all that they need to do their jobs. Workplace anthropologists are part of the Knotel office experience, working to boost culture and productivity. All of this saves valuable time, and eliminates parades of headaches, for C-Suiters and a wide range of other employees.

Just as shared workspace has exploded over the past five years, growing at 200 percent, the new agile office space market is heating up fast. Though the agile office is still young, capturing 5 percent of the New York real estate market today, demand is high and mounting rapidly. Knotel CEO and cofounder Amol Sarva predicts that all U.S. office space — 100 percent — will be flexible by 2020.

Why? The system that was “good enough” for over a hundred years is no longer working. And technology has enabled innovators to create a better solution.

Fast-growing companies that rely on remote workers, freelancers, and collaborative compact workspaces need nimble real estate choices and flexible services. Too many companies lose millions of dollars with traditional leases because they’re stuck in long-term commitments that penalize them financially — whether it’s taking a hit for expanding or being caught on the hook if office needs shrink. An acquisition and a move to a bigger space sounds great, for instance, until a startup can’t sublease their empty office and they’re paying for space they don’t need for another three years.

Agile office space is different. In Manhattan, for example, we can shift tenants among 30 buildings within walking distance of each other to accommodate evolving space needs.

Empty spaces don’t just sit there, like haunted offices. Tenants can swap space to ensure each has the square-footage they need. Our designers also ensure a tenant’s employees won’t sit cheek-by-jowl with employees from another company. In fact, they don’t even bump into each other at the coffee station: each company has its own unique space — an entire floor, at least. No sharing.

The branding, too, belongs to each tenant — not Coworking ‘R Us. Offices are designed with a company’s unique culture and ethos in mind, so nobody will walk into a Knotel-leased office and think about Knotel. But behind the scenes, each Knotel tenant has its own outsourced office service team, driving to boost workplace culture, productivity and happiness.

Welcome to Real Estate 3.0.