A hotel for business
Regus opened its fourth business location in Richmond Thursday with officials on hand to show off the company’s new flexible working space on the 10th floor of the SunTrust Building in the city’s downtown financial district.
“We’re a hotel for business,” is how Paul Spellman, an operations team leader, summed up the company’s business model. At its newest center, about eight tenants have booked some of the 64 office spaces in the 12,000-square-foot business center.
Among its amenities are two fulltime administrative assistants who man a front desk, a conference room, smaller videoconference facility, and a business lounge with kitchen area.
Festooned with balloons for yesterday’s tours, the office space, painted in colorful hues, offers views of downtown Richmond, the James River and the state Capitol.
“Someone can come in and use this space for an hour for $20 bucks instead of going to a Starbucks or a Panera,” Spellman said. Another option is use of an office space for five days a month for $99.
More typically, tenants sign up to use space anywhere from one month to 36 months at rates ranging from $399 a month for a small, one-person, office without a window to $1,500 a month for a larger corporate suite with windows, a view and a furniture tailored for executives. “There’s no capital build out costs,” Spellman said. “If you walk in with a laptop, you are 100 percent functional.”
The centers provide telephones, wireless Internet, utilities, janitorial services and a front desk staff that answers the phone, sorts mail and performs other administrative tasks.
Regus, a company based in the United Kingdom, has 1,800 business centers around the world. Besides the center that opened Thursday, the three others in the Richmond market are located in Glen Allen and Paragon Place in Henrico County and at the Boulders Office Park in Chesterfield County.
So who uses the flexible space?
“We see a little bit of everything, “ said Spellman. “From startups to lawyers to financial advisers and Fortune 500s.” For instance, one of the company’s clients in its executive suite at the Paragon Place are vice presidents for the mid-Atlantic and Eastern U. S. districts of 7-11, noted Spellman.
Occupancy rates at Regus’ Richmond area offices are around 90 to 95 percent, with the space at The Boulders 100 percent filled, Spellman said.
Another source of business for Regus are swing-space deals. That refers to tenants who have to move from their leased space and are waiting to move into another space. These referrals frequently come from commercial real estate brokers who are paid a commission from Regus when they bring the company a deal. “We do one to two deals a month with a broker in Richmond,” Spellman said.
When it comes to flexible office space, the average term is 12 months, though Regus says the average customer stays for 7.5 years.
Besides the services, Spellman says people like the camaraderie. “It’s networking for free,” he said.
Regus, which has about 30 locations in Virginia primarily in Northern Virginia, Hampton Roads and Richmond, saw an uptick in business after the 2008 economic recession. James Richardson, the general manger at The Boulders center, said some small businesses gave up long-term office leases to cut overhead expenses.
Even people who work from home lease space from Regus, he adds. “It gives them a place to meet with clients. It gives them a more professional image.”