An international company specializing in ready-to-use offices will open its first business center in Tacoma, offering startups or foreign firms a way to list a downtown address for a monthly fee instead of a long-term lease.
Starting Dec. 3, the sixth floor in downtown Tacoma’s Wells Fargo Plaza will be run by Regus, a Luxembourg-based company founded by a man who saw a business opportunity in giving business travelers someplace more professional than their hotel room to work.
Two decades later, Regus operates business centers in 550 cities worldwide, including 11 in Washington. The Tacoma location will be the 12th, and the first outside King County. The company plans to open two more by 2014.
Here’s how Regus works: It leases space in one of the top buildings in the market, then divides that space into small offices and work stations. It provides a receptionist and other concierge services. Businesses then can pay as little as $79 a month to claim the address, giving that business owner a place to send and receive mail and phone calls, as well as a professional office for meetings.
Large corporations, to reduce overhead costs, also have contracts with Regus to use its business centers as corporate regional offices.
“It’s a good sign for Tacoma for Regus to think there’s a market need here,” Anthony Hemstad, president and CEO of the World Trade Center Tacoma, said this week. His organization has helped start-up companies from China find offices here as they tried to get off the ground, and those companies had to enter year-long leases even though their fish-or-cut-bait point happened sooner.
“They would have been natural Regus customers,” Hemstad said.
The combination of a well-known downtown address for a one-person office is the key, said Arne Bakker, manager of Regus’s Tacoma office.
“A lot of buildings in downtown Tacoma have space available, but it’s 3,000 to 6,000 square feet,” he said. “Many businesses need 150 square feet.”
David Bovee, a financial services entrepreneur in Seattle, has worked with Regus for almost a decade. Using the company has allowed him to maintain an address even as he scales the size of his business up and down depending on project work.
While overall he’s been happy with the company, Bovee said Regus isn’t always as inexpensive as it seems.
Depending on the level of service, a business could end up paying more per square foot for its Regus office than if it leased the same amount of space directly from the building owner. But Class A buildings usually don’t sign leases that small, nor with terms that essentially allow paying month-to-month.
In Wells Fargo Plaza itself, the smallest office currently available is 892 square feet for about $25 a square foot. Typical commercial leases are for five or 10 year terms.
“Small business owners like me, who want to be in a Class A building, often aren’t comfortable making a long-term commitment for that much space,” Bovee said.
Most office space in downtown Tacoma is in so-called Class B buildings – one step down from the premier spots like Wells Fargo. The average size of a vacant Class B office downtown is 4,326 square feet, according to data from Jones Lang LaSalle. Average asking rent is almost $20 a square foot.
In Tacoma, Regus’s business center will have 57 offices ranging from 75 to 220 square feet. It will have a conference room, a kitchenette, and two full-time receptionists. Bakker said he’s close to 10 percent full, even though the center won’t open for another month.
Tacoma has a few shared-office spaces, though they are much smaller than what Regus will offer. Bakker said he considers Regus to have no competition in the South Sound area, and expects to pull clients as far south as Olympia and from Gig Harbor and the Key Peninsula.
Beyond the physical amenities, having a Pacific Avenue address can give the impression of an established business.
“It’s a filtering system that a lot of people use,” Hemstad said. “It’s unfair, but it’s a fact. When you’re new in town, you need that kind of address.”