Geeks,
My firm (LOCUS Architecture) is currently developing Red Square, a commercial building on Central Ave in the Northeast Arts District – you may have heard the radio spots for it on MPR’s The Current. It will offer 40k+ square feet of environmentally conscious commercial and retail space on 4 floors. You can find more info on Redsquare’s website. The plans for the building have been extremely well received in the planning phase and we are now looking to fill it with tenants. Feel free to pass on the link if you know of people who may be looking to own commercial space.
7 comments so far
And you’re building an appropriate space for Geek Gathers, right?
Yes, and it will be solar powered, so we don’t have to feel guilty about plugging in!
How about ad-hoc workspaces, perhaps available by the hour? I could use a place like that on occasion to have someplace to go and concentrate on my writing for a couple hours. Somehow coffee shops and places like Panera aren’t always codusive to getting a lot done when you have a project to work on?
Michael, buy one of the condos and start a business renting out by-the-hour workspace
I was on my CrackBerry when I saw the original posting. I see what you mean. Very cool idea and I like the environmentally concious part too.
But just for fun… Keeping costs down, we’ll go with the smallest 1st floor unit. Has to be on the 1st floor to get walk-up traffic. 1266sq ft. @ $22/mo. comes out to $2321/mo lease rate.
Add to that:
Internet access @ $100/mo (business cable)
Power $200/mo.
Phone $50/mo for a business line.
We quickly come up to $2670/mo. I’m sure I’m forgetting a couple monthly costs off the top of my head, so let’s call it $3000/mo.
Based on the 1266 sq ft, let’s just say I could completely fill it with 8×8 cubes (64sq ft ea). That’s not realistic, but we’re talking cocktail napkin figures here. That would be 19 cubicles (not allowing for management space). I’d have to bring in about $158/mo per cube just to pay for the space. 9am-9pm hours, 6 days/wk: $0.50/hr/cube, assuming 100% occupancy all the time.
More realistic, but still without fixtures: 25% of the space is for house use — reception/sales desk, storage, etc. That leaves about 950 sq ft of rentable space or 15 cubes (I’d take away from house space to make it work). Based on the same figures above, $0.70/hr per cube at 100% occupancy full-time. Still not too bad when you look at it.
But, so far, all we have is an empty box w/ Internet access and lights. We still have to install fixtures for the ad-hoc office spaces.
We don’t even have a staff yet! Three staff people to cover the 12×6 business hours. Call it $25/hr because not only do you have to pay an hourly wage, but worker’s comp, unemployment ins., etc. Two of them 40 hrs/wk., the third at 24 hrs/wk. That’s 104 hrs/wk @ $25 each, comes to 2600/wk or about 10000/mo.
We’re at $13000/mo and I don’t even have fixtures yet, which are up-front costs.
$600/cube for the walls, desk surfaces, chairs, cable drops. Call it $10000 for fixtures up-front. Finance it across the first year, so that’s another $1000/mo.
Grand total $14000/mo for expenses, and I haven’t even paid myself yet. Break that back down to per cube, per hour and we have roughly $49/hr assuming 100% occupancy. That’s just to break even.
I think I damn near just choked.
Second year costs go down to about $45/hr, 100% occupancy. Still, just breaking even.
Wow!
Yeah, that’s kind of what I thought. It’s really the employee costs that blow it through the roof. Sadly, you wouldn’t be able to do without them and keep any kind of reasonable business hours. Being there 72 hours per week for a business owner just isn’t a reasonable expectation of oneself.
That just means that Red Square is too expensive for office space to support that kind of business.