Coworking Research: Questions about the space.

[Christian]

I'm doing some very early research for a coworking space, and I wanted
to ask a few questions:

1) How much finishing did you require in order to get your space
functional?

2) Did you go wireless exclusively, or did you provide ethernet
connections? And if you did, did you spend the money to have these
inset, or did you run cable and use switches/routers?

3) What percentage of your starting budget did you allocate to
preparing the facility?

4) Where did you get your office furniture? Did you involve the
interested community in donating items, did you buy surplus, used,
auction, new?

5) How many months of lease did you include in your initial budget
calculations? How did the numbers work out for you?

6) What was the biggest obstacle to getting your space ready to work?

I appreciate any insight you can provide. I hope to ask a LOT of
questions here over the next few months while I research.

[Tara Hunt]

Citizen Space Answers:

1) How much finishing did you require in order to get your space
functional?

Our space was really raw when we found it, but our landlord was awesome in helping us get it ready. We paid for some of the materials and he paid for most and the installation.  It took about a month to get it up to speed, putting in new bamboo floors, painting the walls, installing new lights and building a new wall that would separate the small boardroom in the back from the main space.

2) Did you go wireless exclusively, or did you provide ethernet
connections? And if you did, did you spend the money to have these
inset, or did you run cable and use switches/routers?

We are totally wireless. One router from one connection. 

3) What percentage of your starting budget did you allocate to
preparing the facility?

80% ish - we spent about $10,000 total getting the facility prepared, including the furniture, speaker system, mac mini, internet, etc. 

4) Where did you get your office furniture? Did you involve the
interested community in donating items, did you buy surplus, used,
auction, new?

Ikea...except for our chandelier, which I found on eBay for $299 freight included 

5) How many months of lease did you include in your initial budget
calculations? How did the numbers work out for you?

We didn't really have a budget. We just knew we probably couldn't spend more than $3000/month. We ended up finding a great place for $1500/month and spent 2 months rent on the lease. 

6) What was the biggest obstacle to getting your space ready to work?

Finding the right place that was such an awesome deal. 

I appreciate any insight you can provide. I hope to ask a LOT of
questions here over the next few months while I research.

--
tara 'missrogue' hunt
coFounder
Citizen Agency (www.citizenagency.com)
blog: www.horsepigcow.com
phone: 415-694-1951
fax: 415-727-5335

[Jacob Sayles]

Office Nomads Answers:

On Fri, Sep 5, 2008 at 8:36 AM, Christian <game...@gmail.com> wrote:

I'm doing some very early research for a coworking space, and I wanted
to ask a few questions:

1) How much finishing did you require in order to get your space
functional?

Not much at all.  Our original space would have required a serious charm infusion and 3 months to get there but this place was ready to go day 1 and we opened the  doors after having keys for just 3 weeks.  We've done a ton since then to give it our own personal touch but very little structural work was needed.  

 

2) Did you go wireless exclusively, or did you provide ethernet
connections? And if you did, did you spend the money to have these
inset, or did you run cable and use switches/routers?

We are both wired and ethernet.  The space was mostly wired but we needed to run some more here and there for the doors and such.  We are in a dense residential area so wireless is tricky.  We even have some of the best wifi guys around (seattle wireless, shmoo, defcon guys) trying to help us out but with this much traffic it's never going to be perfect.  Folks like the wire.  

 

3) What percentage of your starting budget did you allocate to
preparing the facility?

About 1/2 and some of this is ongoing.  The space continues to evolve.  

 

4) Where did you get your office furniture? Did you involve the
interested community in donating items, did you buy surplus, used,
auction, new?

We put the word out in every direction and found a lot of folks donating usable stuff.  We supplemented this with Ikea and stuff we've built... our conference table is BEAUTIFUL and we are so proud.  

 

5) How many months of lease did you include in your initial budget
calculations? How did the numbers work out for you?

We have a 3 year lease and we negotiated 3 free months spread out over those 3 years.  Oh look at that, it's almost October so we'll get a free month again.  Nice!

 

6) What was the biggest obstacle to getting your space ready to work?

Keeping sane.  Susan and I both prioritize personal mental/emotional health over all else.  We work at a fast pace at times but always check in on each other and ourselves to make sure we are sustainable overall.  We regularly hand things back and forth when things get too much for us and I can't imagine doing it any other way.  This is kind of built in since we both have part time jobs unrelated to Office Nomads so everything needs to be able to be put down.  

With personal sanity in check all other obstacles are easy and fun.  

Jacob

 

- 

Office Nomads - Individuality without Isolation
http://www.officenomads.com - (206) 323-6500

[Derek Young]

Here's the answer from Suit133.

> 1) How much finishing did you require in order to get your space
> functional?

The biggest expense was fixing the shoddy electrical work of a previous
tenant. Other than that, we rehung some trim, replaced some drywall in our
"printer nook", bought furniture, hung art, and considered ourselves open
for business.

We still need to replace some light fixtures, improve the plumbing
situation, and install an access control system.

> 2) Did you go wireless exclusively, or did you provide ethernet
> connections? And if you did, did you spend the money to have these
> inset, or did you run cable and use switches/routers?

We're exclusively wireless. The exception is if folks want to plug into a
router next to the printer. It happens infrequently, but it happens.

> 3) What percentage of your starting budget did you allocate to
> preparing the facility?

50% or so.

> 4) Where did you get your office furniture? Did you involve the
> interested community in donating items, did you buy surplus, used,
> auction, new?

The used office furniture store had an amazing inventory of new and used
industrial-strength conference tables and file cabinets for cheap. Cheaper
than Craigslist for the same furniture in many cases. Plus, they delivered,
carried it up the stairs, and install it all.

Ikea dining tables are used as desks.

Furniture from our homes and past businesses.

A new red leather sofa donated by a friend.

> 5) How many months of lease did you include in your initial budget
> calculations? How did the numbers work out for you?

We didn't have a particularly formal budget, but we looked out six to twelve
months in most of my calculations.

> 6) What was the biggest obstacle to getting your space ready to work?

Finding an appropriately sized space that was mostly finished at the right
price. Once the right balance was found, the rest fell together nicely.

I hope this helps.

Derek
Suite133

[Tijs Teulings]

On 5 sep 2008, at 17:36, Christian wrote:

>
> I'm doing some very early research for a coworking space, and I wanted
> to ask a few questions:
>
> 1) How much finishing did you require in order to get your space
> functional?

just some paint. and of course furniture, fridge, etc. for art we are
doing a rotating system where we hang up new art from local artists
every few months which is for sale as well.

> 2) Did you go wireless exclusively, or did you provide ethernet
> connections? And if you did, did you spend the money to have these
> inset, or did you run cable and use switches/routers?
>

wireless. on a 20mbit ADSL line.

> 3) What percentage of your starting budget did you allocate to
> preparing the facility?
>

100% i guess. a quite reasonable €1500 for five seats and a hotdesk
and of course some cash for the first few months of rent.

> 4) Where did you get your office furniture? Did you involve the
> interested community in donating items, did you buy surplus, used,
> auction, new?
>

50% from thrift stores, 50% from ikea. we had a good deal on desks
made from builders wood (if that is what it's called in english)

> 5) How many months of lease did you include in your initial budget
> calculations? How did the numbers work out for you?

3, and i think we'll be fine

>
>
> 6) What was the biggest obstacle to getting your space ready to work?
>

i guess we just started last week so i haven't run into any snags yet :)

> I appreciate any insight you can provide. I hope to ask a LOT of
> questions here over the next few months while I research.
>

--
Tijs Teulings
tel: +31645004824
http://tijs.org

[Christian]

Thank you all for your responses! It is certainly helfpul to hear. I
have a few more questions:

Does your space represent a profit (by that, I mean your wage comes
from the space) center, or do you run it as a break-even and have your
own business or job on the side for primary income? Do you know what
the norm is for space owners?

Aside from rent and equipment, were there any other financial gotcha's
that really stood out or were unexpected? Did people consume 7 times
as much coffee as you expected, for instance. Also, because of the
heavy computer load, how accurate were any power utility estimates
that you forecast?

Do you have any advice to share on getting started with a commercial
real estate broker? Did you do the research on your own, or did you
rely on an agent to find spaces? Any things to look out for when
hunting for the space that might not be obvious? I know it's important
to verify that the facility can handle power load.

[Tara Hunt]

RE: Do you have any advice to share on getting started with a commercial

real estate broker? Did you do the research on your own, or did you
rely on an agent to find spaces?

Craigslist all the way...but I realize not all areas have the same advantage. We also walked around the areas of the cities we liked and called numbers on signs regardless of the broker.

T

[Tara Hunt]

Oops...hit send too fast. (Citizen Space again)

No profit here. We make a little extra money, but it really goes back into the space itself. And, yes, Citizen Space is supported by Citizen Agency, my consultancy. There are a few spaces I know of that people can draw a salary from, but no wildly profitable ones.

RE setup cost gotchas: What people SAY they want and what they actually end up needing is quite different. Everyone told us: must have photocopier/fax machine. After two years, people have asked 2x for a photocopier and 4x for a fax machine. For this, we sent them to the Kinkos a block away. Coffee? Well, we had grand plans of a fancy coffee bar in-house, but people really enjoy getting up and walking a couple of blocks in the middle of the workday to get a coffee...it's a break. 

T

On Sat, Sep 6, 2008 at 11:17 AM, Christian <game...@gmail.com> wrote:

[Jerome Chang]

Hi.  Jerome here from L.A.  I'm a licensed architect so hopefully these answers will help you.

We have a 5000 sf space, and a 200 Amp panel.  Since we have some pretty hefty rooftop A/C units, we're pretty much tapped out: those units consume some 150A, and the rest is for the office. In our case, we're cabled and have wi-fi, have a fridge, projectors, tv's, etc.  Cabling is definitely a luxury, but since I have tricked out cubicles, you basically have to invest in cabling upfront or risk having to do surgery to remove desk panels and cable later.

In addition to power, is water and other utilities.  What phone/dsl/video cabling already exists? If you're not the only tenant, where will these feeds arrive into the building.  How is it (water, electricity) metered?  These all require some coordination with neighboring tenants and the landlord.  Old buildings are the most susceptible to utility issues.  Line item every CAM (common area maintenance) item so you don't overpay.  The landlord might try to swindle more trash $ to pay for someone else's large volume of trash.

Roof and other waterproof conditions are critical, even if it's the landlord's responsibility, you'll suffer the leaks.  Many landlords view their properties as a line item in their list of many properties, so their disconnect can be quite appalling when dealing with their lack of concern(s).  The less roof and other insulation (single pane vs the better double-paned glass) will sap your electric bills.

Signage.  Negotiate that in your lease upfront.  Agree on where it will be, etc.

Parking is typically 2 spaces/1000sf.  Many spaces that are old or in urban areas will not have this.  You pretty much have to negotiate a separate lease with a parking landlord nearby, which is another reason to read the next paragraph...

I would also recommend working with a broker.  You don't pay him/her a fee, so you might as well.  They have access to MLS database(s) that will cover more properties than Loopnet or Craigslist.  Some brokers will even know the landlord, his broker, the building's history, etc.  Brokers will also help you negotiate terms in various ways, whether that be to get the landlord to provide TI (tenant improvement) money, or look out for non-standard/unorthodox lease terms.  Lease lawyers will help there, too, but rarely negotiate the lease with the landlord directly, which pits you, probably as a rookie, against seasoned veterans.

A building is basically the most complex computer out there.  The utilities are the wiring and circuits.  The people are the CPU.  Doors, air temp, etc. are all your GUI.  So just take a look at the hardware, AND software, and especially the manufacturer - the landlord.

Jerome

______________
BLANKSPACES
"work wide open"

www.blankspaces.com
5405 Wilshire Blvd (2 blocks west of La Brea)
Los Angeles, CA 90036
323.330.9505 (office)

[Jake McKee]

I'm trying to get up to speed on all the specifics as well, so just a quick note to say thanks to Jerome, Tara, and others who have added such great feedback. 

Now back to my learning process! :)

Jake

[Christian]

Hi, Jake! Seems we are on the same track. I'm in the Dallas area as
well, and my research is targeted towards the North Dallas (Plano/
Frisco/etc) area. Alex has opened a great coworking space in Dallas,
but it serves as a) an incubator of sorts, and b) a possible expansion
space for Architel. IT seems that a membership supported devoted
coworking space may have it's place in town as well.

[Jake McKee]

Excellent! I'm in North Dallas too and agree that it would be great to
have something in the Plano/Richardson/Garland area.

I'll drop you a line off-list.

Jake

[Dusty]

Conjunctured's (Austin) Answers:

1) How much finishing did you require in order to get your space
functional?

We leased an old house built in 1918. It was in great condition when
we got it. We had the interior repainted and gave it a good cleaning.
Other than that, it was ready to go.

2) Did you go wireless exclusively, or did you provide ethernet
connections? And if you did, did you spend the money to have these
inset, or did you run cable and use switches/routers?

We're running business class cable on a Airport Extreme with an
Airport Express as a repeater. We also use the Express to take turns
streaming iTunes to the stereo. Sometimes people have wireless issues
with their laptops and have to plug into the router via cable.

We have plans to add business class DSL from a separate provider on a
different wireless router to add some redundancy.

3) What percentage of your starting budget did you allocate to
preparing the facility?

Truthfully, zero. We used all of our starting budget to pay the
deposit with a bit left over. As we got money from members, we
improved the space. Also, after we got rolling we got some modest
investment money to help us spruce up the place further.

4) Where did you get your office furniture? Did you involve the
interested community in donating items, did you buy surplus, used,
auction, new?

We have donated items, we have surplus items, IKEA items, and some
REALLY nice couches from IF+D.

5) How many months of lease did you include in your initial budget
calculations? How did the numbers work out for you?

We negotiated our first 2 months free.... So 2 months. ;)

2 months worked out great. We now bring in enough money to cover all
of our expenses, including rent.

6) What was the biggest obstacle to getting your space ready to work?

We're bootstrapped, and pretty much had no money getting started.
Makes things pretty tricky.

7) Does your space represent a profit (by that, I mean your wage comes

from the space) center, or do you run it as a break-even and have your
own business or job on the side for primary income? Do you know what
the norm is for space owners?

Right now we run it as break-even and have our own businesses.
However, we have plans to scale it so it creates a profit.

Although we're break even at the moment. We (there's 4 of us) run the
space like startup. We have marketing and operational budgets,
balanced books, waterfall financial projections, weekly management
meetings, and we even have an advisory board. We spend alot of time
working on Conjunctured.

8) Aside from rent and equipment, were there any other financial

gotcha's
that really stood out or were unexpected? Did people consume 7 times
as much coffee as you expected, for instance. Also, because of the
heavy computer load, how accurate were any power utility estimates
that you forecast?

Our financial gotcha was our central heat and air. We had to spend
$1100 to get it working. Then we found out it just doesn't have the
oomph to cool our poorly insulated house in the Texas heat when more
than 10 people are working. To combat this we purchased two 1 ton
floor air-conditioners for $300 each. The old house needs better
insulation, and probably a bigger compressor. But the floor units have
solved our AC problems cheaply for now.

9) Do you have any advice to share on getting started with a

commercial
real estate broker? Did you do the research on your own, or did you
rely on an agent to find spaces? Any things to look out for when
hunting for the space that might not be obvious? I know it's important
to verify that the facility can handle power load.

We did some research on our own, but having a professional commercial
real estate agent made all the difference in the world. Highly
recommend you use one.

Hope this helped some. :)

-----------
Dusty
http://conjunctured.com

[Kelly Brown]

I'm doing some very early research for a coworking space, and I wanted
to ask a few questions:

1) How much finishing did you require in order to get your space
functional?

We lucked out -- we found a place that was perfect that only needed
some touch ups. I had budgeted $10k though

2) Did you go wireless exclusively, or did you provide ethernet
connections? And if you did, did you spend the money to have these
inset, or did you run cable and use switches/routers?

We're primarily wireless. We have ethernet -- but that is mostly for
VoIP telephones.

3) What percentage of your starting budget did you allocate to
preparing the facility?

Same as Tara - 80% -- but again - we got lucky.

4) Where did you get your office furniture? Did you involve the
interested community in donating items, did you buy surplus, used,
auction, new?

We tried to do IKEA - but that was a BIG old pain for us.
They have horrible customer service - don't allow for large orders
either online or on the phone and the lead time for getting anything
was like 4-6 weeks.

We found somethings that worked at Kmart & Target' - of all places -
they were cheaper and shipped the same day.
And they look great.

I think the key for us was having an open mind with respect to the
furniture -- we're using mini-dinnette tables called 'parsons' tables.
They work perfect as work tables -- nice finish, good size and we can
re-orient them pretty easily.

You can see some of them in our photostream:
http://www.flickr.com/photos/23924932@N02/sets/72157606921292724/

5) How many months of lease did you include in your initial budget
calculations? How did the numbers work out for you?

I had budgeted 12 months -- BUT most landlords want 36 minimum.
We were able to find someone exiting a lease that had 15 months left
on it. This was perfect as it allowed us to offer below asking price
(70%) because they were stuck with the bill and just wanted to recoup
committed costs on their end.

That and we knew if this didn't fly - we wouldn't have 3 years of
lease hanging over our heads.

I think like the others are saying - you have to shop around and look
for the right deal. It takes time but if you get a landlord wiling to
play ball -- you can generally work something out.

One idea -- I had proposed doing profit sharing with a couple of the
landlords and they were very interested.

It's a buyers market for real estate. What I proposed was an
arrangement that allowed us to pay pennies on the dollar + 50% of
rental fees per new member UP TO -- 10-15% above their asking price.

So the upside was good for them.
The downside was they had utilization on a facility that was otherwise
vacant.

We ended up getting into a historic building which would have messed
up some of the tax benefits for our landlord if they had gone that
route -- but i'm sure this would have worked on a normal building.

I'm going to try this with our 2nd facility and see how that goes.

6) What was the biggest obstacle to getting your space ready to work?

Finding the right location. This took 3 months for us and trying to be
patient through that process was difficult.

Also - the business plan (funding) -- I was simultaneously writing the
plan to get SBA funding -- business plans are a pain but they are
powerful and force you articulate everything in excruciating detail.
It paid off and we got an SBA loan within 4 days of submission -- I
*like* to think that's because we spent so much time & research
getting it right.

Now that we're ready to launch -- that's the fun part -- and where the
rubber meets the road. The furniture, the marketing, the planning --
this is the part i'm really enjoying most.

[axon]

All--

We're still in the buildout stage (new carpeting yesterday, yay!).
Herewith our experience to date;

1) New carpeting, some walls and doors (conference/meeting rooms), new
lighting (track instead of fluorescent tubes).

2) We're going with a high capacity WAP plus gigabit hardwire ethernet
connections for those who want them; DSL backbone.

3) Between the buildout and the furnishings, we're budgeting $35K.

4) We're getting some stuff used/garage sale/craigslist. We're also
partnering with a local independent office furniture company to
furnish the rest of our needs on a lease-to-own basis, with the option
to swap out stuff we don't need for stuff we do (the mix of desks to
study carrels to cafe tables & chairs, say).

5) We have a 36-month lease.

6) The biggest delay factor has been getting our funding approved by
the local workforce investment board. They were totally supportive
from the start, but bureaucracies run slow. But it's all green light
now.

>Does your space represent a profit (by that, I mean your wage comes
>from the space) center, or do you run it as a break-even and have your
>own business or job on the side for primary income? Do you know what
>the norm is for space owners?

Our model is designed to generate surplus cash to support our other
programs. We're a private, non-profit organization promoting economic
development through venture investment. We see coworking as being a
new model for business incubation, and while our primary outcomes will
be the development of growth stage technology companies, we also
believe this has the potential to throw cash. We have a partnership
with the Department of Management at the College of Business at the
local California State University. They have an entrepreneurship
major (an minor) with a 3-unit internship elective. The plan is to
send their intern candidates to us for mentoring and coaching, while
putting them to task staffing the studio and supporting other
entrepreneurs.

One thing I'd like to echo from Tara; don't buy anything until your
members demand it (well, okay, I did just buy a great big microwave/
convection oven at a garage sale, but it was only $10 :-)). Rent,
lease, borrow what you think you'll need until the real world
validates it. As with any new enterprise, you need to work very
intimately with your early adopters; they will help you design your
program to meet their most urgent requirements, which your mainstream
market customers will likely share, for the most part.

We have nine members committed now, with no marketing or promotion
(including one person who saw a post here and got in touch); it's all
been word of net. They are providing the first level of design input
for us. Since this is an extension of our existing operation, we
already have the broadband backbone (which we will multiplex up to
four DSL circuits if demand warrants), the high-speed color copier,
etc. We also have a pro multimedia production studio, which we are
moving into the space, and focusing on entrepreneurs in the New Media/
Web 2.0 space for membership, to leverage our existing investment in
the tools, as well as synergizing the concentration of competencies
around this market opportunity.

Since we're colocated with a casual dining operator (the best pizza in
the time zone, with an espresso bar cafe in the morning), we're only
furnishing a fridge and a nuke. We expect most people will get get
their refreshment needs fulfilled by Celestino's downstairs, which
will also serve as overflow space should we get very crowded.

Good luck with your program!

--Ax

Alan Chamberlain
al...@goldencapital.net
goldencapital.net/go/uptime

[HeatherO]

Hi Christian,
I am very new at this too, so I can't answer most of your questions! However, I can tell you that you should find a broker to help you and look out for things yourself as well. I would be happy to refer you to a broker in your area if you'd like (if you don't like them, just don't use them!). Referred clients often get a higher level of service, so if that would help you, just let me know!

PS. without a broker, there are a few basic things to ask about commercial properties:
Are there CAM fees and what do they include?
What are you responsible for in terms of repairs (usually everything inside the doors, sometimes the doors themselves, the HVAC unit, etc)
What improvements are you allowed to make and what will you have to change/remove if/when you vacate


At Your Service,

HeatherO'

Heather O'Sullivan Canney, RP, Broker/Partner
Heather O' Real Estate, Inc.
Real Living Partners Triangle, LLC

(919)427-7770
104B N. Salem St. Apex NC 27502
www.HeatherO.com
www.ApexGoodLiving.com

[Matthew Wettergreen]

> Caroline Collective answers:

> 1) How much finishing did you require in order to get your space
> functional?

Our space required a great deal of work to get it to a vanilla box
state. Significant demolition of standing walls, rebuilding of new
walls, replacement of new doors, removal of carpet, tile and concrete
preparation and staining, new paint on all horizontal surfaces,
powerwashing of the exterior surfaces, new locks on all exterior and
interior doors, removal of several structurally unsound sheds and
overhangs in the back lot, replacement of the A/C on one of the
buildings, and an asbestos check.

>
> 2) Did you go wireless exclusively, or did you provide ethernet
> connections? And if you did, did you spend the money to have these
> inset, or did you run cable and use switches/routers?

We have four Netgear WAPs that blanket the entire 15,000sqft lot with
wireless. We also had cables re-run to all of the offices in Caroline
although no one is using a hardline connection in the entire building.

>
> 3) What percentage of your starting budget did you allocate to
> preparing the facility?

All told we had about 20k put in for the renovations and an additional
5k in personal funds that we dumped into the renovations and
purchasing items or equipment that we couldn't get donated.

>
> 4) Where did you get your office furniture? Did you involve the
> interested community in donating items, did you buy surplus, used,
> auction, new?
>

It's amazing how many people/businesses have functional but old office
furniture. We started with donations and have built additional desks
to fill the coworking space. Craigslist is a great place to start if
you have a craigslist culture in your city, otherwise estate sales and
close contacts are the best way to find office furniture.

> 5) How many months of lease did you include in your initial budget
> calculations? How did the numbers work out for you?

We have a 3 year lease and worked out a deal with our landlords that
our initial months of rent are at a reduced rate and the difference
between actual rent and rent paid is put on top of the money that we
owe them.

>
> 6) What was the biggest obstacle to getting your space ready to work?

This answer will differ depending on the space and the geographic
location. If the answer is "not having enough support for the project"
then this is a good indication that more planning and community
building needs to be done to ensure the initial success of the space.
Maintaining sanity will always be an issue if you are poor at dealing
with stress (as my partner and I are) and like Jacob and Susan it was
only through mutual support that we got through it. For most people
though I think the most difficult part is finding a space that works
for them based on their budget and initial support. That period can in
some cases take longer than the preparation of the space which
follows, personally, we were very lucky in finding our space
immediately and painlessly.

Matthew