I give advice to our clients daily on whether they should be choosing a traditional lease or something more flexible. I’m seeing that my client’s growth paths are less linear today than ever before and often a traditional lease is mismatched to their current business objectives.
However, there are still MANY companies out there who feel a traditional lease makes more sense.
Luckily, we’re in a continuously evolving market place which = more choice when it comes to real estate options.
A Traditional Lease.
This is usually a commitment of minimum 3-5 years or longer. You’re going to have to lease the space from a landlord or sublease from a company that has different business needs and is moving on from their current space.
Below are a few pros/cons:
PROS
- Autonomy to define how your built environment reflects your culture.
- More choice in terms of geographies you can look at and the number of locations (this continues to change as more and more flex space providers take on more space in major urban centres).
- Less expensive at scale.
CONS
- The process to occupy space takes longer.
- Often more expensive for small/medium companies.
- Have to manage design/construction.
- Less flexible.
A flexible lease.
This is something you can commit to on much more flexible terms, whether that be a few weeks, months or years. There are a number of different providers out there like WeWork, Knotel, Convene, Spaces, & more that all provide different types of solutions that build in flexibility.
Below are a few pros/cons:
PROS
- Flexibility.
- Removal of 10,000 headaches (design, construction, procurement, day-to-day management of the office, etc.)
- Providers can seamlessly fulfil global needs.
CONS
- Less control over culture/privacy
- Premium pricing at certain size thresholds
- License Agreements need more protection than you think, don’t just SIGN!
If you are out in the market right now looking for space, or you’re going to be soon, I’d love to hear from you about which type of solution you think would make the most sense for your business.