Corporate Flexibility Driving Serendipity Labs, Co-Working Growth
Fresh from signing its second Atlanta lease in Alpharetta, a New York-based co-working operator is next planning to outfit the Interstate 75 corridor with up to four locations, all the way up to Cartersville — an hour northwest of Downtown Atlanta.
Serendipity Labs inked a deal for 26K SF at 100 North Point Center East, a six-story, 130K SF office building off Georgia 400 in North Fulton County. At the same time, Serendipity secured a second franchise owner in Atlanta with plans to open four locations along the I-75 spine, including in the Cumberland/Galleria area, Marietta, Kennesaw and Cartersville markets. That is on top of three more planned along Georgia 400, a company-owned venue in Midtown as well as another handful along the Interstate 85 corridor, Serendipity Labs CEO John Arenas said.
The focus on the suburbs is deliberate. Rents are cheaper than they are in the hotter, in-town office markets like Midtown and Buckhead, where Serendipity Labs is debuting at Three Alliance Center. But Arenas said the co-working firm's main customer base — mid- to senior-level executives and small-business owners — tend to want to work closer to their homes instead of commuting into the city.
“You have an individual in the suburbs who really … is a decision-maker and is confused on where he wants to work,” Arenas said. “Our brand is really not focused on the fragile tech-startup world. It's always been a platform for trusted knowledge workers. And that's where they live.”
Serendipity is among a host of co-working operators in Atlanta now expanding into the suburbs. And while still a fraction of the overall office market, the supply of co-working space has reached more than 1.2M SF in Atlanta, according to a recent Colliers International estimate.
Co-working is more than a fad, and the fuel underlying it has less to do with cool or splashy spaces or chatting with people from all walks of life, Cresa Atlanta principal Bob Misdom said. It has to do with corporate America's love of flexibility.
“Many C-suites of corporations do not have a crystal ball that sees out far enough, and they want the flexibility of the short term,” Misdom said. “The short-term concept is pretty desirable. Some [corporate decision-makers] don't even care, and they just don't want to sign a long-term lease. That's why sometimes WeWork has a waiting list.”
While companies will still do traditional office leases for big blocks of space, smaller sites that offer flexible leasing are becoming more attractive. But they can get more expensive long term, Misdom said.
That mindset is driving Colliers International in Atlanta to partner with LiquidSpace, a website that lists subleases, shadow space and empty offices from whole floors all the way down to individual cubicles, all available for short-term use.
Colliers Atlanta CEO Bob Mathews likens LiquidSpace to the Airbnb of the office world. Go online, find a location and amount of space you need, and within 30 minutes, you have a temporary lease, he said.
“We think that [flexible working] will be a phenomenon that will be here to stay,” Mathews said. “My guess is the flexible office market over the next five years could be anywhere from 15 to 20% of the market.”
With LiquidSpace, Colliers not only can help tenants find temporary space as needed, but also help tenants fill up and “monetize” unused office space, he said.
Serendipity Labs has yet to sign a lease outside of Three Alliance Center and 100 North Point Center East. Arenas said Serendipity Labs' suburban customer is much different than its urban one.
“You can't really export that [urban co-working] culture into the suburbs. It's really more people who can choose how they want to work because they're 10 years into their career,” he said. “This is the bigger market, and one that has been under-served.”