Vacancy: Office space for rent
Renting suites in a 'business hotel' allows small firms to save money on overhead, from building costs to administrative staff

By Cindy F. Crawford, Birmingham Business Journal
September 4, 2008

Eddie Lee Rider got tired of the corporate world and went out on his own to follow a dream of publishing a magazine geared toward landowners.

The Birmingham entrepreneur hunted for investors and found one in Dallas that bought the rights to his idea and told him to be ready to go to work the next day – in his hometown of Birmingham.

With a day’s notice, Rider looked around and found Perimeter Park, a business center set up with furniture, staff, conference rooms and even a cafeteria on U.S. 280.

“It really fits my business – it’s fast and it’s lean,” said Rider, who has published about 10 issues of The Land Report magazine featuring stories about Clint Eastwood, baseball Hall-of-Famer Nolan Ryan, Harrison Ford and others.

Perimeter Park is one of about seven similar centers in the Birmingham area and rents space to small business owners and entrepreneurs who want to save money on overhead, especially the cost of owning and upkeeping property and paying and managing employees.

The amount of rented space can vary based on need – and expand over time as business booms, said Dennis Watson, spokesman for The Regus Group, which rents space at Perimeter Park and Southbridge under the HQ Global Workplaces brand.

Cost to rent office space at the “business hotels,” as it’s called in the industry, ranges from $350 to about $4,000 a month at the various centers, depending on how many offices are occupied. And most offer flexible leases, from one month to five years or more.

The Birmingham area has more than 400 rented offices available in the business centers – and those centers report occupancy rates in the 90th percentile, according to the Birmingham Business Journal’s 2008 Book of Lists.

Since the economy took a downturn, Shannon Tyndall, area sales director for Corporate Office Centers, said she’s received more inquiries for office space, with most interested in the short-term leases. The center, which is in Hoover, is 90 percent occupied.

“We handle any administrative need so companies can go focus on making money and doing business,” Tyndall said.

Some startups can opt for a more transitional, nonprofit incubator business center, such as the Bessemer Business Center and Innovation Depot in downtown Birmingham, which help nurture small businesses to success. Rent is typically lower than for-profit centers, but tenants can only stay for three to five years.

In the incubators, leaders lease space to startups, go over business plans and mentor owners. Incubators offer shared conference space and copiers, like private business centers. After the startup grows up and their time there ends, the owners are sent out to operate out of private space, which could include corporate business centers.

Not all home-based business owners want or need full-time office space. Those with a functional office at home who want a place to meet clients that looks more professional often opt for the business centers’ “virtual office” plan. For about $200 a month, home-based businesses or entrepreneurs can use the building as a professional office address, use offices for a few hours a month and have a built-in receptionist answer the phones as their company and forward the calls to their home.

Many choose the virtual office because they got tired of meeting clients at a Starbucks or in a hotel lobby, Watson said. Through Regus, the business owner can reserve time in a conference room or office and have clients meet them there.

It’s not unusual for an owner to bring “props” to the rented office, such as family photos and desk items, to make it look more lived-in, Watson said.

The entrepreneur can give the appearance of being a bigger fish in the small pond, he said.

When Patrick O’Connor and a partner started Flagship Trading Inc., a timber brokerage company, they searched Birmingham for the ideal location – something convenient to the airport and downtown – and they looked to hire a receptionist and accountant. But after finding Southbridge, where the center has employees “that do everything for you,” they signed up.

It’s “cafeteria-style” use of clerical staff, conference rooms and offices that has helped keeps costs down, O’Connor said.

“There’s a potpourri of industries in here,” he said.

Business centers, like Southbridge, also allow companies to reconfigure its rented space depending on need. O’Connor said he’s changed offices three times in his seven years there.

Another perk: Those who rent space and work there more regularly get shared cafeteria space and access to copiers and printers. The staff even helps with spreadsheets, Rider said.

“It makes me look a lot bigger than I am,” he said.

This article was written by Cindy F. Crawford
with the Birmingham Business Journal.
Cindy F. Crawford's contact information is
ccrawford@bizjournals.com | (205) 443-5631