The newest trend in commercial real estate market is that of “headquarters as a service’ (HaS), a third party solution to maintain a growing workspace, without the limitations of a traditional leased out space. Instead of investing in commercial assets that require higher manpower, bigger budgets for maintenance and extensive innovations, businesses are exploring HaS solution to meet their office space requirements. These plug and play offices provide efficient and fun workplaces that provide the infrastructure of a large corporation, without the steep investment, while letting you have your own individual identity.
Not to be confused with coworking, HaS is yet another flexible workspace model with entirely different segmentation, utilization of space and customization criteria.
So, how is it different from co-working?
While co-working spaces are shared between multiple entities, HaS providers offer office spaces that are entirely leased to one entity. For example, when a startup working from a co-working space grows from a 10 member group to a 50 member strong team, they need a space that will not be hindered by others. This is where HaS operators give them the perfect space that reflects their unique culture and ethos, and is tailor made to their unique requirements.. HaS model offers growing firms flexibility in leasing, while creating customized office environment, with a full-fledged move in and administrative support. A company can setup their own unique signature offices that is reflective of their company culture and ethos.
Why does Headquarters as a service make sense?
With HaS, companies can opt for fully built and furnished space with amenities, maintenance, utilities, internet already in place. Opting for a HaS service provider cuts down on the coordination efforts between multiple vendors, thus reducing the manpower required for executing the operation. With the day to day activities taken care of, companies can concentrate on their core strengths and build on them, to reach their business goal.
Theoretically, short-term flexible leases by HaS providers allow companies to test waters in newer areas by quickly setting up and relocating their enterprise to these locations. As can be seen, the market for HaS is on the rise; especially in view of global expansions, upcoming projects and budding businesses. Few companies like The Yard, Knotel have come to understand the potential for turnkey office spaces and have started offering headquarters as a service. The sound economics/ viability of the HaS model can be gauged by the fact that Coworking giant WeWork is also offering HaS as part of its service offering. Also, Knotel, that currently operates in 10 locations in the US including New York and San Francisco, has recently received funding of $25 million and is looking to expand to over 40 locations.
But, is it financially viable?
At this point, one might say that for short-term property leases for emerging companies or for companies that are testing new geographical frontiers, HaS makes perfect sense. While it ends up being more expensive in the long run, the flexibility it provides an organization in a growth trajectory mode negates the cost proposition.