Landlords With Empty Prime Space Turn To Virtual Offices For Profits
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Landlords with empty prime office space are using virtual offices to profit from an otherwise unprofitable situation.
Australia-based Servcorp is one such company. The serviced office-space provider has about 40,000 clients that do not actually lease space, according to Servcorp chief operating officer Marcus Moufarrige. In fact, the company holds space in one of the most prestigious buildings in the country to rent to clients on a need-by-need basis. In Manhattan’s One World Trade Center, Servcorp operates virtual offices on the 85th floor where clients pay around $250/month for the fancy address, a local phone number, receptionists to answer calls and the option to hold occasional meetings in the space, CNBC reports.
Moufarrige said small business growth continues to fuel demand for virtual offices, and many entrepreneurs said having a prime business address is a major marketing boost. While the model works for some businesses and landlords, especially in a strong office market, real estate mogul Sam Zell said on CNBC’s “Squawk Box” that he is unsure how the sector will cope when markets begin to soften.