The Differences Between Executive Suites and Conventional Leased Offices
officebroker.com defines the main differences between executive suites, also known as serviced offices, and the more conventional office lease agreement.
Executive suites include many benefits, such as fully furnished offices
Here at officebroker.com we've helped thousands of businesses to find office space in the US. We specialize in serviced, executive suites, which typically feature short-term contracts, flexible agreements and manageable monthly costs.
But we often receive questions from business owners about the differences between a serviced office and a traditional lease agreement. So we've produced a run-down of the main differences to help demystify the process...
What are Executive Suites?
Executive suites, which are also known as serviced or managed offices, are well-known in the industry as being highly flexible and manageable, which make them very appealing for small and new-start businesses. This type of agreement is generally operated on a short-term basis, where firms occupy space for anything from just one month - sometimes even just a few weeks.
The minimum and maximum amount of time that the space is leased depends on the client and the space available, and is open to negotiation. But on average many serviced office clients choose to keep their space for between 6 and 12 months.
Some clients will also keep their office for the lifetime of a project, known as a 'project' or 'satellite office', which can naturally be a very short-term agreement.
Executive suites are normally ready to move into, with essentials such as cabling, IT, telecoms and furniture often readily installed. This enables new occupants to move in to the office quickly and easily, allowing for 'business as usual' within a day - sometimes even within a matter of hours!
Manageable payment options, often paid monthly, and simple contracts are other classic features of executive suites. They are also well known for their package solutions, such as inclusive utility bills and use of meeting rooms. Larger business centers also offer additional services such as administration assistance, call answering services and on site IT support.
These factors combine to provide a flexible and highly manageable environment for businesses, which typically lessens the effort and responsibility involved in running an office.
Why are Conventional Office Leases so Different?
There are many differences between executive suites and conventional offices, and the two industries have become highly differentiated over recent years.
Conventional office leases are typically long-term, and are often associated with complex contracts that need to be overseen by the property agent and a legal representative. This is similar to signing up to a mortgage - and can be both a lengthy and costly procedure.
This sort of lease is normally suited to large corporations that are well established in their industry, and are confident that their business will be sustainable in that specific location for many years to come. It is not uncommon for such companies to sign leases for 10 or 20 years in advance.
Due to the long-term nature of these agreements, they are often highly detailed and include a number of strict legislations. For example, penalties are normally incurred if a company cancels or tries to leave their property before the end of the lease is reached.
However, in order to make the conventional option more attractive and to compete with the more flexible serviced office, features such as 'break clauses' are included, which give the company the option to terminate their lease part-way through the agreed term. This is particularly useful for businesses, but cancel a lease early is usually tied in with conditions, and sometimes penalties.
Therefore the main differences between executive suites and conventional leases come down to flexibility. This is a key part of the appeal of an executive suite, and many smaller businesses choose to move into this style of office and stay there - even as their company grows.
Their popularity has grown over recent years. In fact, recent statistics from officebroker.com show that enquiries have performed well over the first three quarters of 2009, despite the troubled economy.
For more details about executive suites and to search for an office anywhere in the US, go to us.officebroker.com, or speak to one of officebroker.com's regional experts direct for free and impartial advice.