Before the pandemic, as shared workspaces began shifting the office landscape, Drew Sanden, a seasoned commercial broker, noticed a gap in the market.
He seized the opportunity when a client asked him to come up with ideas to fill a challenging-to-lease space in West Covina.
That project served as “an incubator” for TailoredSpace.
“I’d been batting around this idea of a flexible workspace focused in suburban markets,” said Sanden, who specialized in multi-tenant leasing and property management before launching TailoredSpace with Chief Operating Officer Scott Maples in April 2019.
The company has been expanding its network of office campuses in Southern California suburbs, offering flexible coworking and communal spaces for fixed-price monthly memberships. About 80% of its members live within a 5-mile radius of a TailoredSpace location, including Brea, Carlsbad, Chino Hills, Corona, Rancho Cucamonga, Riverside and West Covina. Each location is in an area with a high per capita income, convenient freeway access, and shopping and dining options all within easy walking distance.
New spaces are set to open later this year in San Juan Capistrano and Santa Clarita.
TailoredSpace also has plans to expand into Northern California, where, like the rest of the country, the office market is in a tough place. A report published in February by Cushman & Wakefield shows that by 2030, the United States will have 1.1 billion square feet of empty office space, a 55% increase from pre-pandemic rates.
“We’re at an inflection point,” Sanden said. “There’s a transition going on: a lot of right-sizing, contraction, even closing of offices. Everyone is trying to figure out what the new norm is moving forward, and to some degree, we’ve benefited from that in these suburban markets. Companies are offering their employees the flexibility to work remotely, and because of that, not everybody has the ability to work from home. We have kids, we have dogs, it’s challenging. And so, we’re able to provide space close to our members’ homes where they can pop in and out. That gives them the flexibility they’re looking for.”
TailoredSpace works with landlords through a management agreement rather than a traditional lease. While the company takes on the full-staff operation, the landlords handle the upfront costs of tenant improvements and accessories — furniture, fixtures and equipment.
Memberships range from a virtual plan starting from $75 per month to a coworking desk starting at $225 per month. Those who require a private office or a customized suite (thanks to moveable walls) can select from $650 per month plans.
TailoredSpace provides conference space starting at $50 an hour.
All memberships include access to common spaces.
The Southern California News Group recently caught up with Sanden, TailoredSpace’s CEO. The interview has been edited.
Q: What goes into bringing a vacant office up to the standards of a TailoredSpace?”
A: We try to reutilize what we can from the existing buildout, but, generally, we end up starting from scratch on a lot of these projects or gutting them significantly because we need the layouts to work for our model.
It’s easy for us if we have a vacant shell space because you have a blank canvas to work with. That becomes a lot easier to space plan when you’re not having to work as much infrastructure.
There are some instances where we’ve looked at a site, and there’s been a lot of reusability, like window line offices that are about the right size. In those instances, that obviously cuts down the tenant improvement costs significantly. So, we’re always trying to target second-generation space that may have been heavily built out — ex-law firm space is always a bonus.
Q: Who covers the cost?
A: The landlords generally cover the bulk of expenses. We work with the landlords from the design all the way to the operation. We’re kind of a third-party operator of coworking and executive suite space, and this is becoming the norm. Most of the larger operators, whether you’re talking Industrious or WeWork, are all pushing toward a management structure as opposed to leases. Landlords realize that even under a lease structure, they’re still putting out a significant amount of capital for tenant improvements. So, for a little additional capital, it gives them the opportunity to share in the upside.
Q: What are the benefits for the members?
A: We are fully staffed so there’s always someone in the front of the space greeting you and your clients. There is full mail service and package handling.
People that go to other operators always feel like they’re getting nickeled and dimed. It’s like, “I’ve got an office, but now I’m paying for coffee and copies,” and it just keeps ratcheting up.
What’s unique about us is that all snacks and drinks are included. There’s coffee and a fully-stocked fridge with all sorts of drinks, from sodas to sparkling waters. We also have a fully-stocked copy workroom with supplies that members can use for free, and there’s a free fixed number of prints provided each month.
Q: Are retail amenities available at all locations?
A: That’s the goal, yes. There are obviously things we look for when we’re opening a new site. Demographics are really important. A higher-per-capita income. We want freeway access and access to retail amenities. So, San Juan Capistrano, for instance, shares a parking lot with a 24-Hour Fitness. There’s a Mexican food restaurant onsite. There’s a brewery on-site, too. These keep people at the site.
The other site that’s worth noting is The Shops at Chino Hills. It’s an outdoor lifestyle center with every restaurant you can imagine and a Trader Joe’s, all within walking distance. That site has performed extremely well. Walkability helps draw people into the space.
For retailers, the biggest issue is how to create traffic during the day. You want lunch crowds and things along those lines. We’re providing that. And then we try to use the local vendors as well.
Q: How so?
A: At each site, there’s a community director. They’re part of the Chamber of Commerce. We love it if they live in the city, too, so they have connections there. There’s this sense of pride of ownership because they’re part of the community as opposed to an outside entity that pops in.
We give a lot of autonomy to our community directors for their monthly events. A lot of times it will be holiday-centric. We’ve done Cinco de Mayo parties with catered tacos and margaritas to Valentine’s Day wine tasting and charcuterie boards. We’ve done things around Mother’s Day where we bring in a florist from the area and then people can come in and create their own bouquets.
We do learning events, as well, where we bring in outside speakers to share and talk about their expertise.
Q: Don’t standard companies typically provide similar benefits to their employees?
A: That’s exactly what we’re trying to replicate because predominately we’re not servicing the Fortune 1,000 companies. Most of our companies are smaller companies or solopreneurs, and community is something they’re lacking. We’re able to provide that and help connect them with other members, a big win for us and one of the metrics for the success of our community directors.
Do you need an accountant? We have someone down the hall who does accounting. Do you need legal help? We have attorneys in here.
Cross-pollinating is an important component of making a successful site and having happy members, too.
Q: What will be the next location after San Juan Capistrano?
A: We have another site in Laguna Niguel that’s probably coming up next; Santa Clarita as well. We’ve been exploring a site in Placentia and we’re in negotiations in Santa Ana. Monrovia and that 210 corridor is one of the markets we’ve been exploring.
That whole 210 corridor, Monrovia, Arcadia – that’s where I cut my teeth in brokerage, and that market has always been so healthy. And now like anywhere else, you’re seeing big blocks coming back for the first time in some of these markets in a long time.
And then we’re doing some expanding down in San Diego County.
Right now we’re pretty locally based, but we have some opportunities we’re looking at in Northern California. Walnut Creek and Santa Ramon are all interesting locations. With that said, I think there’s still a lot more room to grow in Southern California before we come close to satiating the demand that’s out there for this sort of space inside these suburban markets.
Q: Okay, I can’t let you go without asking you about WeWork.
A: (Laughs)
Q: The company experienced rapid growth, but it was not always organized. It raises the question: Was the company over-ambitious and how do you avoid falling into the same pitfall?
A: As a principle, I try to avoid talking negatively about my competitors. So, maybe I can give you what we’re doing differently because tone, to me, is important, and it’s how we train our community directors, too.
What we’ve done differently is focus on cash flow as opposed to growth from the beginning. When we’re underwriting a site, we make sure it financially works. We quite frequently turn down opportunities for growth because we want every one of our sites to be successful. We can’t afford, at the size we’re at, to have a site fail. And so, for us, we need to consistently be hitting our 90% occupancy-plus at these sites and that’s a really critical part for us.
About Drew Sanden
Title: Co-founder and CEO
Organization: TailoredSpace, which he and COO Scott Maples founded in April 2019
Hometown: A Southern California native, Sanden lives in Costa Mesa with his family. “I haven’t ventured too far from SoCal,” he said. “I like the ocean too much.”
Alma mater: University of San Diego
Previous experience: Commercial real estate broker with Newmark and Cushman & Wakefield who specialized in multi-tenant office leasing in the San Gabriel Valley, North Orange County and Inland Empire markets.
Source link
Attorneys and law firms can elevate their online presence with professionally written content from SEO Content Writing Services monthly plan. Our team of experienced writers specializes in crafting blog posts, articles, and written content that accurately reflect the expertise and knowledge of our clients in the legal field. With a keen eye for detail and a thorough understanding of legal terminology, we provide high-quality writing that helps our clients stand out from their competition and engage with their target audience. Trust SEO Content Writing Services for one time article writing or monthly written content to handle all of your written content needs and showcase your law firm's expertise.
If you need written content, blog posts, or articles professionally written for your website, we can help. Go HERE to find out more.
or email us here: myseowritingservices@gmail.com
To find out more about our article writing or blog post services, fill out the form, thank you.
