Workplace Talks: What is Space-as-a-Service?

By: Melanie Jones, CORT National Commercial Real Estate Business Development Manager

Recently CORT’s own Melanie Jones had the privilege of chatting with Caleb Parker of Bold—which is now part NewFlex powered by Newable.  Knowing he’s an upbeat and energized entrepreneur, and leader in the Space as a Service arena, Melanie felt many would be interested in his perspective around change, flexibility, and success in general.

MJ: With the unusual challenges facing us these days, what most motivates you to keep beating the drum of disruption and crafting a new workplace reality?

CP: I believe entrepreneurs and innovators make the world a better place. Over the last decade, I’ve dedicated my work to supporting and championing entrepreneurs. I love entrepreneurial thinkers. I’m an entrepreneur at heart. 

We are natural problem solvers and passionate about making a difference in the world. Many of us are techie and savvy, and because we embrace mobile technology, our work is not restricted to a static location. I learned a long time ago that I didn’t “need” an office to work from.

Our work happens everywhere: at home, on a screen, a plane, over lunch. Business deals happen faster than ever. We contract with people thousands of miles away online and on-demand. But to grow and succeed, sometimes we do need a place to come together with our team, customers, and partners. 

Commercial real estate hasn’t been friendly to entrepreneurs, though. If we’re approved, we have to pay big deposits, spend thousands on legal fees to oblige us to pay for a long time for the right to a white box that becomes our responsibility to make it fit our culture and business needs, and then pay more to make it a white box again when we’re done.

This is the opposite of what a fast-growing company needs from commercial real estate. Yes, we need access to fantastic environments sometimes, but we also need agility. To succeed in business, we have to surround ourselves with smart people and manage risk. The logic of permanent offices and expensive long leases feels outdated in this new economy that we’re in. 

And that’s the problem I’ve been focused on for over 10 years. Because if we solve this problem, we can accelerate innovation and improve the world we live in. That’s what motivates me.

 

MJ: I know part of your mission is to help protect the value of real estate assets as you create flexible workspaces.  Can you expand upon your mission?  

CP: I’m not trying to beat up on the commercial real estate. It was natural for the industry to operate as it has because the customer has been the investor, not the end-user.

But demand for Space-as-a-Service from the end-user has been growing steadily since the global financial crisis of 2008, and we’ve seen massive growth in the last few years. The end-user must become the customer.

Because what happens to value when the demand for your product goes away?

So we’re helping asset owners evolve their assets to meet the demands of the new economy and ultimately drive value across their portfolios.

 

MJ: How do you describe Space-as-a-Service (SPaaS)?

CP: More than ever, people have a choice of where, when, and how they work. They want to go where they feel taken care of.

Customers are calling out for buildings that offer the perfect combination of great work environments, and high quality serviced amenities. They want the option to book workspace by the hour, day, week, month, or year and for that workspace to be an engaging, inspiring space for top talent. And on top of this, they want to have all the services they need at the tip of their fingertips too. Networking events, coffee bars, meeting rooms, a place to relax, and more.

Customers want all of this accessible on-demand and on flexible terms. It’s not just about the building. It’s about providing a space for customers to live and breathe their creativity. It’s about creating a consistent experience, a brand that connects to specific customer personas.

 

MJ: When speaking with building owners, how do you describe the value of SPaaS, the future of it, and the need to transition towards it?

CP: Landlords who are able to provide this are set to be the big winners of this change. By offering Space-as-a-Service, landlords can future-proof their assets, monetize their space, and drive value for customers and themselves.

The fundamentals of Space-as-a-Service are hospitality-driven. Buildings should provide customers with everything they need in one place, paired with excellent customer service, to really drive value from the building.

This is what keeps paying customers in your building, not long leases.

 

MJ: We spoke about your team evaluating the needs and goals of your clients and crafting just the right solution for them.  I love your description of incorporating and aligning “solution layers” when looking at improving the value of a building and tenant experience.  Would you describe how that works and how the NewFlex/Newable portfolio of flexible office brands is designed to support the big picture?

CP: Our job is to help our clients protect the valuation of their portfolios while meeting ROI objectives. 

Every asset has a different business plan and strategy. So it’s crucial to understand these dynamics to determine which brand solution in our group will drive the right economics that meets the business plan of the asset. 

Generic spaces lack brand loyalty, consistency, and a network effect. But specific brands add layers of service, attract the right mix of customers, and create new revenue lines. So selecting the right brand solution adds tremendous value by delivering a predictable customer experience, making the building attractive, and increasing asset value.

 

MJ: At CORT, we provide a Furniture as a Service model that provides access rather than an ownership approach.  What are your thoughts on a world where SPaaS includes flexible furniture that aligns with short-term leases and is completely changeable?   Makes sense, right?

CP: Completely makes sense to me. This is just another step in the right direction of flexibility. Going back to my first answer, companies need agility to grow. If we can reduce the upfront cost and balance sheet debt, we can move faster and last longer. 

MJ: The #WorkBold podcast is the only one dedicated to Space-as-a-Service.  It’s definitely picking up steam in popularity.  Why did you launch it? 

CP: I constantly had the same questions coming up in my meetings with asset owners and brokers. As the SPaaS model gains traction with customers, many in the real estate/finance community have more questions – especially considering all the Wework talk.

So we launched this Space-as-a-Service podcast as part of our Bold brand to help share best practices and push the industry forward. We’ve now been downloaded in 42 countries! 

(Check out Season 1 & 2 on Apple or Spotify, or on the Bold website.)

 

MJ: One of your slogans is “Fortune Favours The Bold.”  As a successful entrepreneur, what do you consider the boldest moves in your journey so far?   Any tips for those of us wanting to be bolder?

CP: Great question. In retrospect, I’d have to say my Boldest move has to be starting a Space-as-a-Service brand that went against the norm of signing speculative leases to grow faster when the entire office sector is geared towards that model. But we didn’t see that as sustainable, and now some are learning that the hard way.

I think being Bold is about taking risks to improve the world. And the first risk we all take is sharing new ideas that challenge the status quo. These are moments when we often feel vulnerable and exposed. But that’s how we innovate. So my advice is don’t be afraid to challenge the status quo.

Melanie Jones is the National Commercial Real Estate Business Development Manager at CORT. She is responsible for building awareness and sharing strategy with commercial real estate teams around the access vs. ownership model called Furniture as a Service.