One-Person Companies
Have Many Office Options

When it's time to move out of the basement, garage or home office, solo workers have an increasing array of office-rental choices. But the variables of cost, convenience and "corporate" image might complicate the decision. While executive suites continue to pitch their sophisticated locations and add-on support services to the solo worker, in the past four years they've begun diversifying their offerings with smaller or lower-end suites and increasingly flexible leases. These could be in downtown skyscrapers or funky warehouse-type conversions that appeal to more creative enterprises.

For Fortune 500 companies, finding the right spaces is no small feat. However, it seems to present equally difficult challenges for entrepreneurs seeking shorter-term rental agreements. When Carl Robinson, a 50-year-old executive coach who runs Advanced Leadership Consulting in Seattle, learned earlier this year that his office rent would rise by 75%, he opted not to renew his lease. He briefly considered moving work home for the first time in more than 15 years. "My wife said, 'No way!' " he recalls.

He shopped around, stopping first at executive suites managed by companies such as HQ Global and Regus Management, which own "Class A" buildings often catering to corporate clients entering a new market or "hoteling" a team of consultants or lawyers for indefinite periods of time.

While these firms offered top-quality space, the monthly rents Mr. Robinson saw ran from $750 and up and included administrative-support and technology services that he didn't need.

Low-Budget Alternatives

He investigated sublet space through searches on OfficeSpace.com and also considered finding an office in an older building, but no clear solution emerged. "I was faced with a familiar conundrum: Do I get another 'Class A' office space for $750 to $800 per month? Or do I just work out of a Tully's coffee shop?"

As a consultant, he needed conference facilities and an environment conducive to meeting with clients, but only occasionally. So corporate suites -- even with the benefits of month-to-month leasing -- were too expensive to justify. Unlike peers who maintain club memberships for the rare business lunch or who rent bullpen offices in executive suites -- where they swiftly escort clients past their work warrens and into the conference room -- he didn't want to present what he regards as a false front.

In the end, Mr. Robinson stumbled on ActivSpace, a company that manages eight less-upscale buildings in areas zoned for mixed office and industrial use. Targeted at independent workers, artists and hobbyists, the Seattle-based company's buildings resemble Soho-style industrial lofts. They offer small, unfurnished office spaces, ranging from about 150 to 300 square feet, for month-to-month rents of about $95 to $300 in markets including Seattle, Portland, Ore., Boulder, Colo., and Berkeley, Calif.

While his 150-square-foot ActivSpace office came with bare floors and unpainted drywall, it cost Mr. Robinson only $200 per month on a month-to-month lease. He could select his own phone- and Internet-service providers, and he has 24-hour access as well as first-come-first-serve parking. The building, though not in downtown, is nonetheless in Seattle proper, just blocks from his home. "This is a great idea," he says.

Still, ActivSpace is bare-bones. To satisfy his need for a limited corporate presence, Mr. Robinson works at the office of a former consulting client one day a week and uses its conference room, paying for the privilege. His monthly office costs, between ActivSpace and his upscale facilities, total less than $400, he says.

Jude Sidall co-founded ActivSpace with her husband, Gary Romain, in 1995. A dancer, she says the company's mission is to provide artists and entrepreneurs with launch space -- unpolished but separate-from-home space -- where they can pursue a passion. According to Ms. Sidall, ActivSpace occupancy levels are high compared to traditional flexible-lease office space, where vacancy is lower but is offset by more costly rents. "We have affordable rents and have to maintain higher occupancy because of it," she says. Ms. Sidall adds that additional ActivSpace site launches are under discussion, potentially in the San Francisco Bay Area, and that the company has received requests to build in Austin, Texas.

Upscale Digs

Other career soloists prefer the high-end pitch made by corporate office suites. Meta Greenberg, a 57-year old Boston consultant who runs Meta Greenberg Speech & Communication, is among them. She just left her Newton, Mass.-based home office of 21 years to lease an executive office from HQ Global. HQ is one of a handful of companies, along with Regus and Equity Office's year-old "FastOffice" unit, that rents traditional "Class A" office space on short-term leases (ranging from one to 18 months, rather than the typical three to 10 years).

In March, Ms. Greenberg moved into her 150-square-foot office with windows overlooking Boston's historic Faneuil Hall and Quincy Market. But the cost of locations like this and the add-on services HQ Global offers can be out of the reach for many small-business owners. Ms. Greenberg declines to reveal her total rent, but says it's higher than $500.

HQ Global's chief financial officer, James D. Burnhamm, says that HQ rents typically are twice "Class A" rates. In Boston, these run $33.75 per square foot, according to Grubb & Ellis, a Northbrook, Ill., real-estate firm. The average asking "Class A" rent in the U.S. at the close of first quarter 2002 was $30.54 per square foot, which represents a 14% decline from a peak during fourth quarter 2000, according to Grubb & Ellis. Rents on "Class A" buildings aren't expected to increase until 2005.

To Ms. Greenberg, the rent is worth it. Her business, which advises telecommunications, business, and engineering executives on professional speaking, used to require travel to New Jersey, New York and Arizona for such clients as Motorola and AT&T Labs. But as the economy worsened and Sept. 11 coincided with Ms. Greenberg's decision to focus more on New England clients, staying in the region but moving out of her house seemed to make more sense. Business peers who work in HQ offices convinced her to try one.

"I wish I'd found this situation years earlier," she says.

The real sell, however, was access to conference facilities in downtown Boston -- as well as any of the other 275 HQ sites in the U.S. Her lease includes eight hours of conference-room access per month. Regionally, she says she's already used HQ offices in Massachusetts suburbs, including Wellesley, Waltham and Burlington. Ms. Greenberg also has used its clerical services, which have led to cost-savings on her graphics production.

She couldn't be happier with her choice. "I'll probably work here until the day I die," she says. "My office is gorgeous."

A Range of Options

John Gallander, vice president-customer solutions at Chicago-based Equity Office, says more venture-backed entrepreneurs have moved in to the firm's FastOffice suites in recent months,, as well as more solo workers. Equity's FastOffice suites are set in "Class A" office towers but include fewer support services than full executive suites to assure faster move-ins and lower costs. "We're still in an experimental mode with this product," he says. "As the economy has soured, spaces a little smaller have become more popular."

Another alternative is a part-time lease. One corporate-suite company, Office Suites PLUS, which manages 18 properties in such Southeastern markets as Atlanta and Charlotte, N.C., pitches a part-time lease called a "Professional Image Package" to entrepreneurs who need a limited corporate presence. It includes a fully furnished office, meeting rooms, clerical support, telephone-answering services and voice mail -- for only an hour, day or month, depending on your needs.

The sublet market, active in part due to dot-com vacancies on long-term leases, is another option for solo workers and start-up owners. "I'm seeing a lot of sublease space hit rock-bottom," says John Heimbigner, Seattle regional director at OfficeSpace.com, which handles listings for the Cincinnati, Denver, Columbus, Minneapolis and Portland markets. Sublease space is relatively inexpensive but is often unfurnished or unwired. While prices vary depending on the primary tenant, most real-estate firms predict ample sublet inventory. Grubb & Ellis reports that sublease inventory has increased fourfold since the third quarter of 2000.

That said, Mr. Heimbigner advises solo workers, especially those working without brokers, to ask tough questions about the main tenant's financial position before leasing to avoid unpleasant surprises later. "Full-floor subleases are a red flag," he says, as are rents discounted more than 35% below market. Since many companies that sublet want a tenant to sign a lease that matches theirs, month-to-month or flexible leases aren't as easy to negotiate.

Whatever your business priorities, you have a growing array of options to consider if you're looking to move your home base. Of course, you could always decide to work at home after all. Mr. Robinson says he ultimately wants to build a separate home office to "avoid throwing money down the rent drain."

-- Ms. Hodges is a free-lance writer in Seattle and rents an ActivSpace office.

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