WASHINGTON, DC—The nation's capital, along with San Francisco, will see the US debut of one of Europe's leading providers of coworking space later this year. Mindspace, which already operates facilities with major office owners in London, Berlin and Frankfurt, among other markets, is slated to roll out locations at Hines' One Franklin Square in Washington and Equity Office Properties' Market Center in San Francisco in the second quarter.
In their levels of service to occupants and in their degree of amenities, the Mindspace facilities are intended to appeal to large enterprise groups as well as small and medium-sized companies. “Up until about a year ago, there was a misconception that this was an efficient real estate product for companies of up to about 20 employees, and that with more than 20 employees, it's not economical anymore,” Itay Banayan, VP of real estate at Minspace, tells GlobeSt.com. “What we've tried to educate people on is the fact that the real occupancy cost per employee, even for large enterprises, is more or less breaking even with the occupancy cost for our space, when you add the capex and transaction costs that a corporation might incur in a direct lease.
“Also, there's the fact that many organizations in long-term leases take more space than they need because they don't want to outgrow the space,” he continues. “So all of that created inefficiencies in the previous model.”
He says that users of high quality coworking facilities have discovered other benefits outside of the basic real estate considerations. For one thing, Banayan says, a coworking space can encourage collaboration and innovation among employees.
Banayan points out that across the portfolio, each Mindspace location, while distinctly Mindpsace in feel, is also distinct from the others. “They don't feel like commercial spaces; they seem very personalized,” he says. “We're mixing the old and the new in the space, we're bringing in a lot of local artists. The location in Berlin will be local to Berlin and the location in Hamburg will be very Hamburgerean in a way, and the same for the location in London, Warsaw and so on.”
As to how Mindspace attracted Equity Office in the case of Market Center and Hines in the case of One Franklin Square, Banayan says that although he's not aware of who his company was competing with for these spaces, Equity Office and Hines have a great deal in common with the other prominent office landlords with whom Mindspace has worked throughout Europe, as well as inTel Aviv. “We've discovered that these landlords are forward thinkers,” he says. “They understand the future of this and the benefits to the property of bringing in a quality coworking provider.”
Over time, Banayan says of Equity Office and Hines, “we hope to develop relationships with them on different buildings in their portfolios.” JLL advised Mindspace in negotiations with both US landlords.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
