What’s Up With That Empty Office?
While in a meeting at our HQ last week with potential Knotel partners, I noticed that a partial floor directly across the street sat raw and unoccupied.
It wasn’t the first time I’ve seen something like this.
We’ve been in our new HQ for about five months now and that half-floor has sat unchanged the whole time. There’s been no activity whatsoever. No construction, no move-ins, no furnishings, no people.
Commercial real estate isn’t free. So someone out there is footing the cost of that vacancy—even if the rest of the building is buzzing.
Why, over the course of several months, hadn’t anyone moved into what appears to be a prime location?
I think one of the following four scenarios is happening—each of which is relevant to the Knotel product offering.
Scenario #1: It’s already rented—but the tenant doesn’t need it yet
Just because the office looks empty doesn’t mean a company isn’t paying for it. There’s a chance someone is leasing the space already—they just haven’t grown into it yet.
Due to inefficiencies in the leasing market, companies are often forced to take on more space than they actually need—whether or not they’ll actually end up using it. It’s a gamble that often doesn’t work out, so companies end up paying for space they never need.
In such a scenario, rent that could otherwise go toward growth and expansion is being sent to a landlord for an office that’s empty and unbuilt.
Knotel has partnered with several companies in this very position. We manage and rent out expansion space for a period of months or years until the business is ready to grow into it.
Scenario #2: It’s already rented—but the build out is taking forever
Though it’s rented, the office might look empty because a tenant’s build out is taking weeks—or even months—longer than they thought it would.
This happens. A lot.
Contractors and designers are expensive. You need to file appropriate permits, get a building clearance and often advance contractor fees into an escrow fund. This all takes time—and a lot of it.
The Knotel product offering includes fully customized and managed workspace design and construction. Say goodbye to tracking down contractors, managing budgets, or missing deadlines. We take care of it all.
Scenario #3: It’s not rented because of some strange feature
Maybe the office isn’t rented. Not because it’s in a bad place or the rent is too high. But because of unique features—layout or ceiling height, perhaps.
Our workspace designers can partner with owners to transform otherwise wasted assets into attractive offices for growth companies and enterprises.
Scenario #4: It’s not rented because it’s not available long term
The office might be empty because it’s only available for a few years due to an expansion right, demolition right, or right of first refusal.
Any vacancy can hurt a building’s value. Vacancies cost landlords money and can make transactions difficult and costly (e.g., sales and refinancing).
Knotel can help in these scenarios, too. We offer fully customized, managed headquarters—and on short terms.
We partner with landlords to help ensure their spaces are always occupied. It’s that simple.
In the four above scenarios—and countless others not listed here—Knotel can step in as a creative supply and demand solution for commercial real estate owners and would-be tenants alike.
Drop us a line to learn more about how Knotel can help you.