The (executive) suite life: One month and counting…

Wow, it’s amazing that a whole month has already flown by.  It feels like only last week I was getting settled in to experience the executive suites at 500 N. Michigan Ave.  During my time here, I have had the privilege of meeting several independent professionals who have embraced the value of working in a shared environment – networking with other professionals and experiencing the empowered feeling of having an established office, without having to deal with all of the hassles of a conventional office.

Since a month has passed, I wanted to write a summary of my experiences.  I have decided to evaluate the experience through a table of pros and cons of officing in an executive suite.  Note that these are my observations – I encourage professionals in the executive suite industry to provide additional insight or response to my observations.

Pros Cons
All telecommunications needs accounted for; no need to manage multiple service providers Space can get pricier than conventional offices when a business reaches 4+ people
Space is furnished to your specifications Locked into building standard finishes
Always room to effortlessly schedule large meetings or impromptu gatherings The space is not yours to do with as you please
Turnkey VoIP and internet service available, so you’ve essentially got a dedicated IT department rolled into your rate You don’t get to choose who else occupies the other offices
Easy to move in and get started
Receptionist and answering services lend a professional quality to your office without substantial fees or management hassles

To be honest, it was hard for me to come up with a lot of cons, when considering a small business.  Although office suites are not ideal for large teams or businesses, small businesses of 1-4 employees can get a professional image, quality space, and productive environment at an affordable rate without the hassles that come with conventional space.

The (executive) Suite Life: Appreciating the importance of transit when selecting an office space

As I type this, I’m sitting in an office at Avenue Business Center, which occupies the entire third floor at 500 N. Michigan Ave.  I mention the address because it is not only a feature but also a benefit of the space.  Size of the office space, location in the city, proximity to clients or other businesses, quality of the space – these are all factors that get a lot of attention during a site selection process.  One factor that frequently is overlooked when doing a space search is transit access.  The location of the office where I am working demonstrates the value of convenience.  I can walk half of a block from my home to pick up my choice of bus line that will run express down Lake Shore Drive and drop me off right in front of my building – total commute time: 20-25 minutes.  In stark contrast is my roommate’s commute – living downtown, but working in the north suburbs, he takes a bus west to a train north to a shuttle that drops him at his office complex – total commute time: 60-75 minutes on a good day, plus 3 changes of transit type, which can add additional latency.  My roommate is a very special exception to the rule; most of my peers in the late generation X/early generation Y (already in the work force) are not willing to accept the commutes that our parents have historically.  We want immediate action and quality of life and office location can have a substantial impact on our employment decisions.

Now, that isn’t to say that no employers are taking transit into consideration when evaluating their space.  The US Government “gets it”.  Working on the GSA projects for the US Census Bureau, I was impressed that proximity to bus line was a question included on the market survey forms, to ensure that the employees at the Census Bureau would have access to transit to and from work.  If you are in the market to evaluate your location and ways to improve your top line (i.e. the revenue from hiring the best, brightest and most productive), take into consideration where they live and how far they’re willing to travel.  You may find that a small time investment up-front will yield substantial returns down the road.

Since I saved so much time on my commute, I was able to sleep in 15 more minutes and still have almost half an hour on each side of my work day to be more productive.

Going on day 2 at Avenue Business Center

Today I’m actually doing double duty.  I’ve been at my old office in the morning and will be working out of my office suite at Avenue Business Center. Although it is nice to see my colleagues in the real estate office, I am becoming more aware of the benefit of having my own space from which to work. Despite the moniker of “shared space”, having my own office changes my outlook on getting work done and also permits me more control over the environment in which I work. Not to mention the fact that I am exposed daily to a variety of other business professionals and their respective talents – essentially, Avenue Business Center is creating a melting pot of Chicago professionals and I have the privilege of being part of it.

Movin’ on up… exploring shared office space in Chicago

When I worked at Microsoft, we often spoke of “dog-fooding” or “eating your own dogfood”, with the idea being that employees were encouraged to test early versions of new software, like pre-release Office or Windows, in order to ensure that it was ready for prime time.  In the world of commercial real estate, I have decided to do the same.  On behalf of the small business segment of my clients, I will be moving in to an executive suite/shared office space so that I can walk a mile in their shoes.  Over the next thirty days, beginning tomorrow, I will be spending a good portion of my office time at Avenue Business Center, located at 500 N Michigan – which is conveniently right along both the #144 and #146 express bus lines from Uptown.

I will be operating GameTime 24×7 – one of my newest business ventures – out of this office in an effort to understand the key elements of shared office space, the concerns or challenges that my clients might find when looking for such space and the social benefits of co-located offices.  By experiencing this first-hand, I expect that I will be able to better serve my clients going forward.  This blog will be the venue from which I share my observations and thoughts over the coming days.

The Under-Utilized Tenant Representative

NOTE: This post applies more to small and mid-sized businesses than for large enterprises with in-house real estate and facilities employees.

Since I transitioned into commercial real estate, I have served as a tenant representative for thirteen clients across eighteen active or completed transactions.  About one-third of these deals have come from existing corporate clients, while the others have come through referrals and various prospecting methods I employ.  Whether this number of projects sounds like a lot or a little, there’s one thing they all have in common – if given the opportunity, I could have provided so much more to these clients.

Except for a few particular brokerage firms that focus exclusively on tenant representation, like UGL Equis and Studley, most commercial brokerage houses have built up their tenant representation work out of their existing property management and leasing practices.  An Entrepreneur.com article from a few years back identifies roughly when the shift to begin focusing on tenant needs took place, stating that the process still does not suitably address the needs of the tenant – “most brokers… continue to focus on the specific goal of the property owner–the signing of the lease or purchase agreement.”  Using the term “out-tasking”, the article continues by stating that the right approach is to look at the business strategically and determine what processes, or tasks, can be delegated to an outside firm.

Unfortunately, smaller firms do not typically have the resources or know-how to determine which processes can be outsourced, or even what processes they may have to deal with in the future.  As a result, I feel that many firms, including those of several existing clients, still look on a commercial real estate broker as a space finder, neglecting to appreciate the vast resources we may have at our disposal to help them with more of their facility and real estate needs.  For instance, when was the last time you asked your tenant rep to perform a lease audit to ensure that you weren’t being overcharged for operating expenses (see Are you being served… more expenses than you deserve?)?  Or called on your tenant rep to help you evaluate your space plan to see if you might be able to improve space use and decrease your rentable area (see Calculating your office space needs)?  What about asking your broker to peruse your lease to see where key terms might impact future financial planning, relocation or expansion possibilities (see There’s gold in that contract)?

You may be wondering why I italicized “transactions” and “deals” in the first paragraph.  My goal was to emphasize that these client experiences were based on the old perception of broker as space finder.  At the end of the day, tenant representatives can do a lot more than help their clients simply find space.  We can help you identify your site requirements, ensure that you find the right space on your timeframe, assist you with navigating the build-out and furnishing process and more.  In the past several years, the industry has evolved significantly to better meet client needs.  Now, all you have to do is ask.

Giving Zolve.com’s referral engine a test run

In anticipation of my next referral opportunity, I decided to give the Zolve.com referral submission tool a bit of a test run.

My first concern is that the Customer Contact Information screen in Step #1 asks for fields best suited to a residential broker.  I would love to see a future version offer a drop-down box to select residential or commercial (perhaps even investor as well).  Upon selecting the appropriate the type, the most suitable contact fields would be displayed.  For instance, with a commercial client, it’s handy to be able to include company name and even website.

Under Referral Details on the same step of the submission process, we are offered radio buttons with three choices.  Using a hypothetical business client seeking to lease space in a new market, I selected “Referral to Real Estate Broker”.  Unfortunately, this then provides me with a Transaction Type drop-down with options of a) Selling Real Estate or b) Buying Real Estate.  Commercial leasing options are not addressed yet.  I chose to work around this by selecting “Referral to Real Estate Service Provider”, which prompted me with more flexible fields to complete details of an office lease requirement.  I didn’t like that the fields are text boxes, giving me too many options to complete the request, but this will only become a real issue if the data is to be used beyond the referral time frame, e.g. if it is to be mined by Zolve to evaluate usage and improve service.

I very much like Step #2.  The referral source is given the option of screening potential referral recipients.  You can include a message and even ask questions.  Special thanks for whoever implemented the feature of maintaining a frequently asked questions (FAQ) list for quick access.  When I went to select a couple of recipients from my Sphere, no contacts populated in the pop-up window, so that’s a bug that needs to be zapped.  I opted to “Skip this Step” and proceed to Step #3.

At Step #3 – “Send Referral Offer”, I appreciated that the “Rewarded to:” field did produce a pop-up window auto-populated with my Sphere members.  I selected a colleague from UGL Equis and the Terms of Referral section populated with an “On Line Referral Agreement”, outlining the terms of the referral and the guaranteed level of service on behalf of the referred client.  Zolve understandably includes a small fee to account for their support in the transaction.  One thing worth noting: there are two types of referral agreement and anyone who intends to give or receive referrals as a licensed real estate salesperson or broker needs to make sure that they a) correctly choose their profession when they register and b) update their license information to prove that they are, indeed, a licensed real estate agent.  Otherwise, the broker<->broker referral agreement is not available to select.

All told, this is a pretty comprehensive tool for managing referrals.  I certainly appreciate the long-term implications of using this tool.  Not only will we be able to rate the performance of our referral recipients, but our existing and prospective clients will be able to view those ratings.  As Brad Whiteman stated in his recent blog post on Win-Win approaches to the business, we have to pay attention to our primary responsibilities.  I anticipate that Zolve will create a foundation to ensure that only those real estate professionals who embrace honesty, integrity and fiduciary responsibility will rise to the top of this peer-reviewed engine.

Latest issue of CoreNet Global’s The Leader is posted

The Leader, CoreNet Global’s magazine dedicated to corporate real estate strategy, has gone live with the November/December issue.  This bimonthly magazine is once again chock full of case studies, performance analyses and other goodies for the corporate real estate director or consultant.  Over the course of the next week, I will be perusing the articles and reviewing/commenting on those that are particularly worth review.  In the mean time, you can check out the full issue of The Leader, hosted by NxtBook.com.