CP Group To Launch New Flex Office Brand Across 6 Buildings
CP Group — formerly known as Crocker Partners — is preparing to build out 100K SF of flexible office space, dubbed worCPlaces, in half a dozen office towers in Florida and Georgia, Managing Partner Angelo Bianco told Bisnow.
The move makes CP the latest office landlord to jump on the self-operated coworking and flex office bandwagon. While the coworking and flex space industry is still dominated by the major players such as WeWork, IWG and Industrious, which often reach management agreements with landlords, some office owners that want the flexible space in their buildings are opting to manage it in-house.
In May, Bridge Commercial Real Estate. the Atlanta-based subsidiary of Bridge Investment Group, announced that it was rolling out 158K SF of flex office space called Abridge in various buildings of its portfolio in five metro areas, with plans to grow it to 1M SF. Firms like Tishman Speyer and Swire Properties also have their own coworking brands.
“All of this together is a sea change in how we're operating our business to focus on our clients and how we can help,” Bianco said. “It's something that we think is long overdue in our industry.”
CP is establishing worCPlaces at the five-building Lakeside office campus and One and Two Ravinia office towers, both in Central Perimeter, as well as One and Two Town Center towers in Boca Raton, and SunTrust International Center and Citigroup Center, both in Miami. In July, CP Group purchased the iconic CNN Center in Downtown Atlanta for nearly $145M.
Like its coworking brethren, CP Group is offering flexible contracts starting month-to-month on a variety of spaces, including plug-and-play spec suites, shared office spaces and private offices that share common gathering areas. Bianco said CP Group also will offer amenity and concierge services like laundry pickup and gas fill-ups.
More office owners want to keep all of the revenues from flex office users in their buildings, especially since tenants often pay more in rents over time in exchange for flexible terms, said Austin Dubois, assistant director of Savills' Workthere Americas flex office consulting arm. Landlords also can directly address the growing demand from their larger tenants for flexible arrangements instead of depending on third-party operators. That should help boost a landlord's brand in the eyes of their primary customers, DuBois said.
“Why have it branded something different? Why not have it co-branded with the landlord's branding?” he said. “If it were my business, I would be targeting larger companies. From a landlord perspective, you already have them in your building.”
Bianco said major coworking brands are already tenants in some of CP Group's 14M SF portfolio. But the landlord is starting its own operation to gain more upside; the pandemic recession demonstrated the weakness in outsourcing the spaces' management.
“What we were finding was the economic models presented to us didn't make sense,” Bianco said. “[They're] great until the economy goes sideways and they just don't pay rent anymore. So when they're making money, they get all the upside. And when they're not making money, I take the economic hit.”
Bianco said worCPlaces allows CP Group to preserve and extend its brand to new customers that otherwise wouldn't consider traditional office leases and their long-term commitments.
“We were open-minded to try and bring in a third-party provider. But I wanted to make sure that we could maintain the quality, because it's impactful to our reputation,” he said.
DuBois cautioned that landlords need to have expertise in the field, given the services are more akin to the hospitality industry and tenant churn is much more frequent.
“If you just take typical property managers and say, 'Run this space,' they're not going to be able to do that,” DuBois said. “It's just a lot more labor-intensive.”
CLARIFICATION, AUG. 18, 5:30 P.M. ET: The majority of CP Group's worCPlaces program is focused on flexible office arrangements over traditional coworking. An earlier version of the story did not make that clear. The story has been updated.