How Breather Is Cornering The On-Demand Event Space Industry
A growing tech company is on its way to carving a niche within the on-demand meeting industry.
Montreal-based Breather may double its number of available locations by the end of 2017 and is coming off a new round of Series C funding having raised $40M. Breather provides rentable meeting space for anywhere between a couple of hours and a few days.
The concept of on-demand meeting spaces is taking off alongside a growing demand for flex-office space. Companies like LiquidSpace and Marriott's Workspace On Demand and Breather are hoping to capitalize on the increased demand from companies looking for last-minute space to conduct meetings.
Breather expanded into Toronto, Washington, DC, Los Angeles and London within the last year, according to Breather vice president of real estate Maggie Burns. Next up on its list will be a rollout into markets within Denver and Berlin.
The tech startup anticipates it will perform well in Denver considering the strong office market and growth of new startup and tech businesses within the area, while Berlin will help further its expansion into Europe, Burns said.
Burns said office landlords are seeking tenants like Breather to help differentiate their tenant mix while absorbing available space, which has aided the company in its expansion.
"Breather is an amenity and a rent-paying tenant," Burns said.
During Q1 2017, the firm completed 47 deals for 78K SF worth of leases, and Burns expects similar momentum throughout the rest of the year. The real estate team toured 800 properties during the quarter across about a dozen cities.
Breather has more than 350 bookable spaces, and Burns expects that number will jump to 700 or 750 by the end of the year. When it rolls out in Denver and Berlin, Breather will launch a number of sites all at once instead of its previous strategy of a gradual ramp-up. Denver and Berlin are expected to go online in the third or fourth quarter.
The company also has big plans for its existing markets, having already made moves to double the size of its presence in San Francisco within the last 12 months. San Francisco is Breather’s second-largest market, next to New York City, according to Breather head of real estate Peter Sellick, who oversees real estate in San Francisco and Los Angeles.
It plans to expand from 70 locations in San Francisco to 100 by the end of the year by moving further into South of Market, Union Square and Jackson Square; Oakland and Palo Alto also came online within the last year. In Los Angeles, Breather just entered Hollywood and West Hollywood and is actively cultivating its Culver City, Westside and Venice markets.
The Art Of Market And Location Selection
When it considers a new market, Breather will look at the basic demographics, market availability, who are the large owners and which industries and tenants are growing, among other aspects. Not all locations are the same, and the company has learned to adapt based on each market’s dynamics, Burns said.
In Washington, DC, for example, tech and startups make up an important part of its clientele, though there are more traditional corporate users as well. DC also has been slower to grow because leases take longer to establish. Since Breather typically wants a fresh, clean and modern look, build-outs can take longer in some markets compared to others.
Breather will not lease just any space. Sellick said location and having a good landlord partner are big determining factors. The company is a fan of natural light as well. Breather typically grabs around 3,500 SF to 4K SF and divides the space into smaller rooms. Often the company will collaborate with landlords and/or enter into revenue-sharing agreements.
Among the landlords it works with in the West are Kilroy, Blackstone, CIM Group, Decker and Bentall Kennedy. Breather does a mix of direct leases and works with brokers, such as Cushman & Wakefield along the West Coast. It partnered with Colliers International in London in 2016.
As for business strategy, the company's goal is to have enough meeting space available nearby should a client's regular space be booked up, according to Breather regional manager of the West Coast Austin Marshburn.
How And Why Clients Use Breather
The space is meant to provide a flexible environment where a retail manager, for example, can brainstorm different mannequin designs for storefronts or a professional firm can sit down and use a whiteboard for a formal meeting, Marshburn said.
Clients have also taken to using Breather to host quarterly executive meetings off-site, reducing the number of conference rooms companies lease in their offices. Demand is coming from companies of all sizes, including those with 25 to 100 employees who occasionally need a little extra space.
“It’s not worth it to them to have an extra 800 SF for the next few years that they use once every two months,” Marshburn said.
Breather designs its spaces to cater to the needs of clients in each region, however varying. Whereas tech and professional firms have been big in San Francisco and Silicon Valley, the entertainment industry has been a big client for Breather in Los Angeles. Entertainment clients typically require more creative spaces than a traditional meeting space, which may mean renting more warehouse conversions in Culver City.
Conventions also provide unique opportunities for Breather. Convention participants often utilize the space to showcase products in a more intimate, professional environment. Each Breather space offers WiFi, whiteboards and materials, extension cords and typically a TV. Some spaces will provide kitchenettes or a sink or a fridge. Breather also offers a concierge service through which people can order food.