Commercial real estate has been witnessing a sea of change, and few individuals are as versed in the ongoing shift as Christelle Rohaut, the CEO of Codi. In a conversation with Christelle on From the Ground Up, she shed light on the myriad of challenges the commercial real estate sector faces and how her company is at the forefront of the transformation.
It Is a New Era for Office Spaces
The name WeWork is often associated with flexible office spaces, but its recent financial hiccups have put the spotlight back on the broader market’s demands. Among the companies making waves is Codi, which distinguishes itself by not merely offering co-working spaces but by providing private dedicated office spaces.
There is even a sweet spot. As companies outgrow the co-working phase, especially when they grow beyond a team of 5-10 members, they need new solutions, and Codi has positioned itself as the go-to solution.
The Drawbacks of the Archaic Leasing Model
Another point of interest is the traditional leasing model of long-term leases, which has always been cumbersome. Companies looking for spaces are frequently deterred by the tedious process of searching, negotiating, and setting up.
The current demands of businesses have changed — they seek ease, speed, and flexibility. With office space evolving from a status symbol to a means to bring people together, there’s a pressing need to disrupt the long-term lease model with innovative solutions.
Rohaut articulates this shift vividly by saying that companies today do not want to manage the space themselves, and that is precisely the demand that Codi aims to address. How? By offering short-term leases and end-to-end process management for their clients, a shift likely to be seen more moving forward.
The Urban Struggle and Potential Solutions
Major American cities are also in need of a shift, with many grappling with vast amounts of unused office space. In order to remedy the situation, they need to rethink their approach, something Christelle’s background in city planning provided insight on.
It is necessary to make office spaces more tenant-friendly, adapting to today’s needs and moving away from outdated leasing models. There’s a vast difference between what companies want and what landlords are still offering, and bridging this gap is crucial.
One unique solution presented by Codi is their “Hybrid HQ” model. Companies can have dedicated office spaces for just a couple of days a week, ensuring they only pay for what they use. This innovative approach aligns with hybrid work models where people only meet when they need to, representing a significant shift in how businesses view and utilize office spaces.
The Future of Office Spaces
Christelle acknowledged the pioneering role of WeWork in making co-working spaces mainstream but pointed out their flawed business model. Unlike WeWork, which took on long-term leases and bore all the associated risks, Codi seeks partnerships with landlords. This collaborative approach means risks are shared, benefiting both parties.
Landlords, according to Rohaut, stand to benefit from short-term leases as well. The shorter leases reduce their risk while also allowing for periodic rent readjustment in tune with market demands.
It’s abundantly clear that the commercial real estate sector is in the midst of a seismic transformation. The landscape is evolving rapidly, driven by changing business needs, technological advancements, and innovative companies. As cities and businesses adapt to a new era, partnerships, flexibility, and adaptability will be the keys to success. As Christelle pointed out, the days of lengthy leases are drawing to a close, ushering in a new age of collaboration and innovation. We will see a convergence of interests, as landlords and tenants share in the opportunities and rewards of short-term leases and responsive real estate solutions.