Blurred Lines: How landlords can balance risk when customers want flex and service
Insights from Serendipity Labs CEO, John Arenas
John Arenas, Founder and CEO of the upscale, hospitality-based workplace brand, Serendipity Labs, joins Bold Founder, Caleb Parker, to share insights on how Serendipity Labs is helping landlords future proof their portfolios through a "manchise" model. (This isn't his first rodeo - scroll down to see his bio)
Serendipity Labs is one of the fastest growing corporate coworking brands with 35+ locations in 17 states across the US in urban, suburban and secondary markets and opening across the UK in 2021.
John believes that every office landlord is now part of the flex office industry, whether they like it or not. Because that’s what enterprise customers expect.
So he has some advice for asset owners looking to bring Space-as-a-Service into their portfolios.
Landlords should think twice before signing a lease with an operator that only has exposure to the downside risk. John shares how landlords can balance their risk and stay in control of their building value by deploying a model that aligns investor interests with the operator brand.
In this episode we talk about credit aggregation, gaining access to channels that reach enterprise customers, why John is bullish on suburban markets and how to support the work from anywhere trend.
If you have any questions or feedback on this episode, email firstname.lastname@example.org
- We're starting to see a blurred line between flex and conventional leases
- Landlords are now in the flexible office industry
- Demand for flexibility is not going away because business cycles are short and uncertainty is high
- Landlords want to have Space-as-a-Service with a flex component in a building to meet this demand, but we’re seeing challenges in the lease model with operators
- The Manchise model aligns interests of the asset owner and operator brand
- Landlords are aligning with Serendipity Labs in secondary and suburban markets for better quality credit aggregation and access to channels to reach customers they couldn’t reach on their own
- Landlords get their location managed and participate in the economic upside
- A good manchise agreement should be considered tantamount to an agreement with a property management or facilities management company combined with a leasing and marketing agreement, but with better credit aggregation.
- Serendipity Labs is growing in suburban and secondary markets to support corporate occupiers by creating entire footprints that the corporate occupier doesn’t have themselves
- Most corporate occupiers don’t want to sign a lease for under 10,000 SqFt in a secondary or non-HQ market
- And "work from home" (WFH) doesn’t work for everyone
- So they’re supporting "work from anywhere" (WFA) and enabling democratisation of workplace choice
- During Covid times suburban locations are seeing a faster return to occupancy than city centre locations
- Corporate occupiers are making decisions to enable an alternative to commuting to city centres / and employees want solutions to escape from home offices
- Suburban coworking occupancy is returning faster than city centre locations
- Serendipity Labs is starting to see small meetings (less than 20 people) return
- John's advice for landlords who want to bring in Space-as-a-Service (SPaaS) to their portfolios:
- Choose an operator with network and reach
- Match the right brand to the building
- The right brand can add value to the right building
- The SPaaS brand flag you fly on the building says a lot to customers about the quality of the building
About John Arenas
John has a proven track record of bringing ground breaking innovations to the corporate real estate and hospitality industries.
In the early 2000s, John Founded Worktopia, an online reservation system for sourcing office & meeting space and other workspace “on-demand”. In 2008, he secured venture capital finance to focus on the hotel meeting space vertical where he established an online marketplace for travel distribution with partners such as American Express, Travelocity, and the global hotel chains. He went on to be named one of the 25 most influential executives in business travel before exiting through an acquisition by SignUp4 (now part of Cvent).
Before that he founded Stratis, a chain of franchised Flexible Office centers that he developed across 11 US States, primarily in suburban and secondary markets. Stratis was acquired by Regus in April 2001, where John joined the leadership team as President of the Americas and reported directly to CEO Mark Dixon.
Then John led the restructuring of approximately $1B in lease obligations, comprising over 3MM square feet with 42 landlords across the US, saving $350M in cash for Regus, bringing the company back into profitability, resulting in an 11x share price increase.
Now he’s at it again, building one of the fastest growing corporate coworking brands, Serendipity Labs, across the US, and now the UK through a partnership with NewFlex. But unlike his time with Regus, he’s leading Serendipity Labs with a better economic model for landlords.
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