If you are set on having your own office space with a dedicated lease, various options are now available to meet your needs.
A decade ago, if you sought your own private, self-sufficient area for your team, your sole choice was to commit to a long-term lease and handle every aspect independently.
However, this is no longer true with the emergence of flexible office environments. You can now secure the same exceptional space and have a dedicated team of professionals overseeing and managing the entire process for you. This is now referred to as the managed solution.
Choosing between a traditional lease or managed offices often hinges on what aspects of the office experience you prioritise. It also considers what responsibilities you are willing or able to operate independently.
We have crafted this blog to assist you in considering these factors to determine what is best for your workspace.
How Managed Offices and Traditional Leases Share Common Ground
- Design
Within managed offices and traditional leases, a wealth of opportunities exist to personalise the space to reflect your identity truly. Generally, both alternatives can be explored by organisations seeking to infuse their company culture and unique working style into their surroundings.
From incorporating your logo on the walls to designing product displays within the workspace, either leasing option can serve your business well if your goal is to convey your brand narrative in your new environment vividly. Whether you prefer a managed space or a conventional lease, you have the creative freedom to shape an office that resonates with your vision. This enhances employee morale and impresses clients.
- Private Facilities
In a serviced environment, it is common for you to share communal amenities with other organisations. Traditional leases bear a closer resemblance to managed office leases in this regard. Both alternatives present excellent opportunities for businesses that desire dedicated space to cultivate their brand identity and workplace culture.
They provide a self-sufficient floor or an entire building with private access to all essential facilities. This arrangement allows companies to create a unique atmosphere that aligns with their values while benefiting from the shared resources that foster collaboration and innovation among tenants. Whether you want to establish a vibrant office culture or enhance your brand presence, both options offer the flexibility and autonomy necessary to achieve your objectives.
How Traditional and Managed Office Leases Differ for Your Business
- Term Length
Contract durations in managed offices are generally more adaptable. This typically ranges from 18 months to three years. This flexibility is especially beneficial for smaller, agile businesses that may be in a phase of expansion or downsizing. It is ideal for companies with a shorter-term outlook compared to larger enterprises.
Although the COVID-19 pandemic has led to a slight decrease in the availability of shorter terms for traditional leases, companies often commit to a longer tenancy in these spaces. Consequently, this choice is better suited for larger organisations that understand their future needs and maintain a stable growth outlook. These businesses can secure their space and focus on their strategic objectives without worrying about frequent relocations by opting for longer leases.
- Delivery Time
With managed offices, you gain the advantage of a more simplified contractor selection process and can anticipate moving into your new workspace within 8 to 12 weeks.
In contrast, opting for a conventional lease means planning for a longer setup period. Typically, a delivery timeline of 16 or more weeks is expected. This is because you will manage sourcing and project oversight independently unless you bring in a design and build company.
- Design and Fit-Out Expenses
Much like maintenance charges, office relocations in traditional leases will entail a significant initial investment in Capital Expenditure (CapEx) and a series of projects you must manage independently. Every expense must be carefully evaluated during the search process, from space fit-outs to interior design requirements.
If you have a clear vision for the design and know exactly how you want the space to look, this option could be a great fit. It is especially suitable if you also have the financial resources to start immediately.
In contrast, with managed offices, there will be minimal to no upfront CapEx to account for, as everything will be bundled into the monthly fee. You will also have the advantage of delegating the project management responsibilities to a team of professionals. Thus, it alleviates the burden on you and your staff.
This approach is particularly beneficial if you wish to distribute expenses over time while gaining access to expertise throughout the journey. This ensures that you achieve optimal results for your workspace, especially if you do not already have a professional team to assist you in this endeavour.
- Maintenance Charges
The primary distinction here is that with traditional leases, you must arrange and pay each specific office-related expense individually. From cleaning services to maintenance repairs, there will be many services for which to establish and manage invoicing, all of which need to be considered alongside the initial rental fees. This option can make it somewhat more challenging to predict overall costs.
Conversely, in managed offices, all expenses are incorporated into the monthly fee, covering everything you would typically need to handle separately. This structure enables Office Managers to devote less time to the miscellaneous tasks that fall within their responsibilities and allocate more effort toward significant business areas, such as employee engagement and company culture. Moreover, it enhances financial forecasting capabilities as you will know how much you will pay each month over a defined period. This provides greater clarity and stability in budgeting.
| Parameters | Traditional Office Leases | Managed Office Leases |
| Lease Duration | Flexible lease terms, often short-term, long-term or month-to-month. | Typically long-term leases ranging from 1.5 years to 3 years. |
| Customisation | A high level of customisation is possible. However, it requires significant time and investment. | It can be customised to a company’s needs. A third-party provider manages the office and organises the space based on the tenant’s specifications. |
| Upfront Costs | Higher upfront costs including security deposits, renovation, and setup expenses. | Lower upfront costs with minimal initial investment. It usually requires a security deposit, which can be equivalent to several months’ rent (typically 4-6 months). |
| Maintenance Responsibility | Tenants are generally responsible for all maintenance and repairs. | Provider handles all maintenance, cleaning, and repairs, relieving tenant responsibilities. |
| Utilities and Services | Often, tenants receive separate bills from utility providers for electricity, water, etc. Also, a business may need to manage contracts with service providers like internet companies. | Utilities and services are usually included in the lease, providing predictable monthly expenses. |
| Flexibility to Scale | Scaling often requires renegotiation of lease terms or moving to a different space. | Easy to scale up or down based on business needs, with options for additional space as required. |
| Community and Networking | Limited opportunities for networking. The focus is primarily on individual business operations. | Strong community feel with networking opportunities among diverse businesses in the same space. |
Choose Wisely for Growth with Managed Office Leases or Traditional Alternatives
The benefits and drawbacks of each office option can vary based on a company’s current standing and long-term goals. Factors like industry, size and company culture all play a role and may guide your choice between a Managed space and a Conventional lease.
DevX is a premier managed offices provider, leveraging advanced technology to support businesses at every phase of their office journey, from selecting the ideal space to thriving in it. If you are prepared to take the first step toward finding the perfect space for your team, reach out to their experts today.
