Conventional space is cheaper per square foot. That is the whole argument for it, and on a spreadsheet at full occupancy it is a good one.
The trouble is that almost nobody runs at full occupancy for five straight years.
Count the total cost, not the rent
Rent is roughly 60% of what an office actually costs. Fit-out, furniture, utilities, internet, cleaning, insurance, reception, repairs and the management time to coordinate all of it make up the rest.
When teams compare like for like, the gap between a serviced desk and a conventional lease narrows to something much smaller than the headline figure suggests.
Price the option value
A flexible agreement is an option on your own uncertainty. If there is a realistic chance you double or halve in eighteen months, that option is worth a great deal.
Teams with predictable, slow growth and a stable headcount above about forty usually do better on a conventional lease. Almost everyone else does not.
Do not forget the exit
Dilapidations at the end of a lease routinely run to tens of thousands. It is the line item most first-time tenants forget entirely, and it lands at the worst possible moment.
Elena MarchettiFounder & Managing Director
