Real Estate Case Study

Flexing Room | A Spotlight on Regus

Adaptable workspace provider Regus provides global offices for a variety of companies and needs.

by Marianne Hale

Employee flexibility has long been considered an asset in the workplace, but in today’s ever-evolving business world, it’s becoming increasingly important for the office space itself to be flexible.

Enter Regus, a global provider of flexible workspace that appeals to everyone from the small-business owner just getting started to Fortune 500 companies looking to set up shop in a new city, and a whole host of businesses in between. The company provides clients with a physical address, office space, administrative support and access to meeting rooms in its 1,700 business centers, scattered across 600 cities in 100 countries worldwide. 

Regus Vancouver

Businessman Mark Dixon founded the company in 1989 in Brussels, Belgium, after noticing many professionals doing business in hotel lobbies and cafes for lack of a more sufficient work environment. Since its inception, Regus has grown tremendously across the globe, and its expansion in Canada alone—from two business centers in 2000 to 60 by the end of 2013—is just a snapshot of its tremendous success.

Wes Lenci, vice president of Regus Canada, says his team plans to open 40 more business centers in Canada by the end of 2014—all part of their ongoing quest to connect the entire country. Colliers International has partnered with Regus Canada, and together they have strategically created an expansion road map after analyzing every single town, city and potential submarket across Canada. Wherever Regus decides there is a viable market to open a new center, Colliers sets forth on its behalf to locate and secure the most optimal office premises to meet the requirement. Regus, in turn, constructs numerous offices within the space and then rents to a multitude of tenants in the marketplace that are seeking an entrepreneurial business culture with like-minded professionals.

Each center is equipped with a reception area, conference rooms, offices and private meeting spaces, as well as communal areas, such as a kitchen and business lounge. No two centers look identical, Lenci says, although they all have essentially the same amenities. The centers will often incorporate some elements of their locales into the décor, as well. A center in Vancouver, BC, for example, integrates blues and greens to evoke the surrounding natural beauty of the city.


Clients & Services

Generally speaking, Lenci says, an entire floor of a building is converted into a new Regus center, averaging 16,000 square feet—enough space for offices for approximately 150 Regus clients.

So who are these clients? Think big names like Facebook, Amazon and Hewlett-Packard, and small businesses and independent contractors who need flexible solutions.

Regus

“We have lots of clients like that,” Lenci says. “They can stem anywhere from lawyers, accountants and financial planners to engineers, software developers and Web page developers. We even have home improvement companies that office with us. They manage their businesses out of our centers in order to maintain a professional image.”

And that’s just in one business center. 

Maryanne Goodwin is the national sales manager for employment agency Transline Resource Group, one of the 50 fastest-growing companies in the United Kingdom. Transline recruits and manages temporary and permanent employees for companies so they can focus on other aspects of their businesses. When a client made the move to Canada, Transline followed, temporarily securing three office spaces at a Regus center in Ontario. Once it outgrew the spaces, the company moved to a permanent location.

“The Regus office represented a way for us to be very polished and professional,” Goodwin said.

In addition to Regus’ office space, its reception area provided a professional greeting space for potential candidates, and Regus also took care of Transline’s other administrative needs, including answering phones, faxing and shipping.

Of course, office space is just one component of Regus’ offerings. While one Regus business center might have 150 clients on-site, another 150 virtual office members, may—for a monthly fee—use the center as an answering service and mailing address. The fee also grants them access to Regus’ business lounges, where members can pop in to enjoy free Wi-Fi and refreshments in a professional environment, rather than having to work in a loud coffee shop or hotel lobby. Depending on the package, they may also enjoy the use of a private office for as many as five days each month. And the packages aren’t limited to sole proprietors. Hewlett-Packard, for example, provides a lounge access card to 200 employees across the country.

Regus Toronto

Lenci says that no matter which Regus location you work from, members have access to the company’s entire network. That means you have access to all of its 1,700 business centers. “We’re a global company,” Lenci says. “Once you’re a member of one location, you’re a member of all locations.” With the help of the Regus smartphone app, it’s easy to find an office, business lounge or book a meeting room in a nearby location. If, for example, you’re traveling abroad for business in the U.S., Europe or Asia, you can find a nearby Regus center to work from.

And then there are the fringe benefits to working out of a Regus center—networking being chief among them. Shared spaces like the kitchen and business lounge provide Regus clients with opportunities to meet other professionals. Goodwin, for example, mentioned that a Transline colleague met their benefits provider, another Regus client, in the elevator.


Meeting a Demand

Tobin Davis, Executive Vice President of Colliers International’s Toronto office, has been working with Regus Canada since 2006. He says Regus’ success boils down to essentially one thing: “They’re simply satisfying demand by catering to the evolving needs of today’s tenant.”

Davis explains that the business landscape for office space is changing, and companies don’t require the type of space they once did. There is a growing need for tenants to become more efficient and secure greater flexibility in their physical space. “A commitment to permanent office space (and a longterm lease) often detracts from these objectives, which is why Regus has become such an attractive solution to so many companies,” he adds.

Regus Toronto

Regus is also a scalable office solution. Say, for example, a company starts by leasing space for 10 people, but then decides to downsize to five. Regus’ flexibility allows for that. On the flipside, say the company begins with 10 and then expands to 20 people. That works in the Regus model, too. “It’s the ideal solution for companies in a state of transition,” Davis says.

And then there’s the speed at which Regus can set up a new client. While it could take months for a company to find its own space, negotiate an offer and a lease, apply for building permits, draft construction drawings and then build out the space, in a Regus office, the company can be in operation within a day of putting down a deposit. 

“Regus provides a key differentiator,” Davis says. “Speed to market. They can get somebody up and running within 24 hours, instead of several months. They also provide flexibility in their length of lease terms. Six months, 12 months, 24 months—whatever the client requires, Regus is agreeable. Regus provides what a typical landlord is often unable to provide—flexibility of terms.”

Plus, Davis adds, those clients with multiple Regus locations (nationally or globally) can have peace of mind knowing they have just one landlord. 

From the Colliers perspective, Regus provides an option for Colliers’ clients who desire first-class office space without spending their own up-front capital on items such as leaseholds, furniture, fax machines, photocopiers and servers—or spending the time searching for space and negotiating a lease for permanent space.

“If someone says, ‘I just left my practice of 10 years. I’m starting up my own company now,’ Regus is the instant solution,” Davis says. “A phone, a desk, an identity—everything is ready to go.”

It can also be a solution for a company that’s renovating. As it’s meant to be a short-term solution, Regus complements commercial real estate, because brokers can send their clients to Regus offices whenever there’s a lag in getting a more permanent space set up.

“Regus provides the Colliers brokers, or all brokers for that matter, with a solution that traditional office landlords can’t provide,” Davis says.

Regus Vancouver

For now, Regus Canada’s business centers are 90 percent occupied, with 80,000 clients across the country. “People obviously like what we have to offer,” Lenci says.

Among the 40 locations Regus Canada plans to open in 2014, Lenci lists more centers in Ottawa, Toronto, Vancouver, Saskatoon, Calgary and Edmonton.

Part of its plan to connect the entire country includes expanding into smaller towns with fully automated business centers, which would be equipped with Wi-Fi and printers, according to Lenci. Similar smaller-scale operations are already in use in places such as Germany and the United Kingdom.

“There are a lot of opportunities in Canada, and by continuing to expand our network, we help our clients be successful,” Lenci says. “That’s what we’re working on in the next five years.”


This article is featured in Colliers International's Winter 2013/2014 edition of Knowledge Leader Magazine.

View the full magazine.

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