Operators may choose to set a consistent commission rate or negotiate rates on a case-by-case basis. Where operators set a commission rate, it’s often advertised clearly online. The Yard, Workbar and WeWork are good examples of this. Offering a 10% commission for months 1-12 is quite common, as is 2% for months 13-36 and additional amounts for members who expand and take more space. Exactly who constitutes a ‘broker’ is up to the operator - it may be a large office agency or a well-connected individual. Rachel Gerstein, Owner and Founder of Sandhouse, reminds us that despite set commission rates, it’s important to remember they are ‘always negotiable’.
Once an arrangement has been made with a broker, the relationship shouldn’t start and end there. Coworking spaces can do certain things to support brokers and aid their success. Danny Babington, Instant Offices, notes “it’s the obvious things that are the hardest: reliable systems to service enquiries, updating listings and sharing information relating to new openings, expansion plans and billing”.
Search Office Space identify communication as another a key element in achieving maximum sales, particularly between their own sales team and the operators sales team. This allows “a true understanding of whether there’s room for negotiation around coworking prices. Where there’s a good relationship with senior contacts at coworking spaces, executive decisions can be made fast to get larger deals over the line and important marketing material can be shared for prompt follow-ups.” Jon Posener also notes that many coworking spaces do appreciate the difference between small brokers who pass every lead regardless of budget and requirements, as opposed to the more established firms like themselves.
Who Closes the Contract?
Some coworking spaces take complete control of leads as soon as the leads are provided by a broker, whereas others allow brokers to close the deal on their behalf. Instant Offices, for example, are critical to the entire sales process, meaning trust plays a big factor in relationships with the firm. Where operators do invest time into the relationship, this could pay off when those seeking coworking memberships rely on Instant Offices to make the right decision for their business by recommending the most suitable spaces.
Search Office Space are also heavily involved in contractual negotiations, agreeing discounts and fit-out requirements. Proposals are sent by the operator to the broker, allowing Search Office Space to directly deliver on their behalf. Throughout instances where they’re not involved in the entire process, the operator will often keep them in the loop via their own communications.
Workbar emphasises how “it’s important for the operator to communicate with brokers throughout the sales process so they can be confident in knowing where the deal stands if it hasn’t been completely handed over to them”. Jon Posener highlights how it tends to be the “smaller companies that pass leads to an operator and have little further involvement”, again differing from experienced workspace consultants.