One of my favorite aspects of the real estate business is the continued innovation in how physical space is used. Technological advances have allowed these innovations to scale and opened up a plethora of other opportunities to disrupt the traditionally stodgy real estate business.
A few weeks ago Atlas was transitioning to a new office so I spent a couple days working out of my apartment. Working remotely typically isn’t a problem, in fact working on my time in locations of my choosing is often how I’m most productive. I was sitting on my back patio one morning when I got a call from an existing investor who was in-town from the west coast and had a few moments for a quick meeting. Now what? I couldn’t invite him to my 1-BR apartment, a crowded coffee shop isn’t ideal.
I popped on my iPhone, opened the Breather app, and booked an hour at one of the Flatiron locations. Being the first time I used the app, I was skeptical. However, the process couldn’t be simpler. I was greeted by the doorman, entered the code to the private Breather space, and enjoyed a comfortable space with a cool industrial feel. The space was equipped with phone chargers, books, a couch, and easy to access high-speed internet. Not only was it a cool space, the investor was impressed too!
Earlier this week, I toured that same building with the broker who’s marketing its sale. During the tour of the 125,000SF space, the broker mentioned how much the tenants loved having the 500SF Breather space in the building. Any landlords who are skeptical about leasing to Breather, let that sink in…
I was so impressed with the concept that I asked Packy McCormick (thanks to Jon from TheSquareFoot for the intro), the NYC City Manager for Breather (and fellow Philly native) to share some insights to the company.
It’s Wednesday morning. You’re getting some work done from home when your client calls and tells you they’ll be in this afternoon and would love to stop by your office to see the progress you’ve made on their account. Your bedroom may not make the best impression, so you quickly hop on the Breather app, reserve the SoHo location from 3 – 5pm, and tell your client to meet you at 611 Broadway, Room 806 at 3. After putting the finishing touches on your presentation, you head to the space, hit “Check-In” on the app, enter the code into the lock and discover a beautiful, private space to call your own for the next two hours. Your client shows up and is impressed by the comfort and professionalism of the space, and by the fact that you’re not wasting her money on expensive office space, but paying only for the time you need.
Living and working in a big city like New York, there are countless situations in which we need a “third space,” somewhere that’s not your home and not your office, to meet, be productive, or just relax. Breather is taking small and underutilized real estate and building a network of those spaces, beautifully designed and accessible with only a smartphone.
In the short-term, this means that people can access a curated network of other businesses’ excess space at the tap of a button, and can re-think the assumption that they need to have a conference room for their team to be able to meet. This frees up that space for more desks internally, and allows them access the fresh perspectives that come with getting out of the office.
On a longer time horizon, Breather will allow individuals and companies to re-think how they view office space in general. Could you save on the cost of office space if you let your workers work remotely, and book Breather spaces for teams to meet when necessary? Could you get that larger space you know you’ll need to grow into eventually if you knew that you could put the excess space up for rent to those who need it now until you’re ready for it yourself?
This re-thinking is already beginning to happen. VaynerMedia is working with Breather to provide workspace flexibility to all of its New York employees. VaynerMedia currently rents Breather’s Flatiron and Flatiron 2 locations Monday through Friday to give employees the opportunity to collaborate on projects, meet with clients and hold team meetings outside their usual environment. They can stimulate their creativity with a change of scene and enjoy the focus that an alternative workspace can provide. What’s been rewarding to me, is that even though they have a dedicated office to work from, VaynerMedia employees still take the opportunity to work from Breather.
Speaking to our members, we hear countless similar stories of people choosing to get out of their home or office and spend some productive, or simply relaxing, time in a Breather. The demand is there. The major challenge for us, as a startup in the real estate space, has been solving the supply side of the equation. While some landlords “get” the concept and are willing to try putting a Breather space in their building, there are many more who would rather have the 2-person PR firm or small team of architects as tenants in their small spaces. With an average of 3-4 offers on each space that we’re interested in, they don’t see much of an incentive to try something new. This is beginning to change, however, as the value of having a Breather becomes more evident.
For example, in many of our locations, we have been approached by other tenants in the buildings who want to rent our space to hold team gatherings or client meetings there. With little effort on their part, landlords who work with Breather are able to create a shared resource for all of their tenants. Furthermore, as more buildings are attempting to re-brand as “tech-friendly,” having a Breather space on-site serves as an obvious marker that they mean it. Due to these factors and more, we are seeing an increasing amount of inbound interest from landlords and are being offered more spaces in our existing landlords’ portfolios. One even recently asked if we had any job openings that his daughter could apply for!
A key takeaway from our experience that can be used by other real estate startups is that often, you need to be flexible enough to understand what makes landlords tick and work within the confines of their existing systems until you can prove to them why your model makes sense. I literally (using literally correctly here) had to beg one landlord to let us lease her space by telling her I would be fired if I didn’t. Now, the space serves as a resource for her other tenants and she’s asked us to convert more offices in the buildings to Breather spaces.
There’s still a lot of wood to chop as we continue to shift the workspace paradigm, but with powerful support from our members and increasing buy-in from the real estate community, we’re off to a good start.