Office Space Advice
Q&A: Norman Fox Discusses Executive Office Suite Realities
Published June 1st, 2009 by Jennifer LeClaire
What’s really going on in the executive office suites industry? Is it growing by leaps and bounds or shrinking in a down economy? That depends on whom you ask and what part of the world you are in.
Norman Fox brings a unique perspective to the conference room table. Fox is head of AOPlan.com, an executive suite planning firm based in Philadelphia. Fox designed his first his executive suite in Conshohocken, Pennsylvania in 1988. Since then, he has planned or participated in the development of nearly 100 centers nationwide.
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In part one of this two-part Q&A, aBetterOffice.com sat down with Fox to discuss the executive office suites business in a down economy, the changing rules of the serviced office game, and some of the hottest markets for growth.
Are you seeing an uptick in business during this down economy?
People I talk to are cautiously optimistic about a turnaround in the fourth quarter of this year. Personally, I don’t believe we will see the markets we enjoyed prior to the bubble burst in the near future. There will be challenges but decent profits will be possible through creativity and product flexibility.
Are the “rules” changing in the serviced office industry? Should they be?
Rules are always changing in this industry and they should. We base our businesses on service and flexibility. The needs of center users are a moving target. The new emerging economy will cause current and future center operators to be creative and sensitive to the needs of these users and the new markets and opportunities they bring to the industry.
What makes a prime location for serviced office space? What key factors do you look for?
The usual: market, demographics, facility, leasing and construction costs, and workforce.
What markets are the hottest for serviced office space these days and why is that the case?
In general, it appears that the major commercial real estate markets such as Chicago and New York are suffering from the current environment. Secondary, sub-markets, and emerging areas in the south appear to be doing better. Conventional wisdom tells us that downsizing and an entrepreneurial workforce will create a new and larger user pool for centers. However, price sensitivity and common use, off-the-shelf technology could easily keep this group in their home offices.
Is there “overbuilding” in some markets yet? Or is there still room in most markets for additional executive office suites?
Some, such as Atlanta, could appear to be. I believe there are always creative space operators and unique centers.
How are executive office suites companies differentiating themselves from one another these days?
In evident and non-evident ways.
In evident ways, some are raising the bar in aesthetics, services, technologies, and creative space products. In non-evident ways, operators are re-visiting the cost bases by casting new and less expensive leases, rehabbing their centers to provide better space efficiencies and more relevant space products for the new center user.
Finally, they are revisiting their technology backbone and service offerings. They are finding opportunities to reduce costs while preserving quality and marketability.
In part two of this series, we’ll look at the latest trends in space planning for executive office suites, furniture, technology and artwork trends, and some interesting niches.
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About the Author
Marcus Hester June 1st, 2009 at 10:48 am
Reducing costs is a major ‘silent’ differentiator in today’s market. If executive office suites can cut the cost of doing business, they can do one of two other things as a result: earn more profits or compete more on price in the marketplace. It sounds from the rest of the article that the serviced office industry needs to focus on some cost-cutting measures at any rate.
Rob Zeus June 1st, 2009 at 11:22 am
This is a telling statement: “Conventional wisdom tells us that downsizing and an entrepreneurial workforce will create a new and larger user pool for centers. However, price sensitivity and common use, off-the-shelf technology could easily keep this group in their home offices.”
With all the talk of the boons of serviced office space in a down economy, working from home is still the cheapest solution for many. It might not be the most professional set up, but then entrepreneurs can go rent a meeting room when they need it. Maybe that’s what some of these serviced office operators should be focused on.
Elizabeth Sanchez June 1st, 2009 at 11:29 am
I like this guy. He seems to have a fair and balanced look at the serviced office industry. Of course, he’s not directly vested like an executive office suites company or a realtor would be. He’s pegged some real industry trends here. I look forward to seeing what else he has to say in the next installment.
Melanie Jones June 1st, 2009 at 11:48 am
Interesting that Mr. Fox has designed 100 of these executive office centers. I imagine he’s seen a lot of changes to the use of office space during that time. I saw on his site that he has a white paper on the rules of the serviced office industry. This is a good read. Anybody that wants more information should download it.
Bill Brookshire June 1st, 2009 at 11:53 am
I thought it was fascinating that he called out Atlanta as one potential area where there’s still potential strong growth in the serviced office market. I wouldn’t have thought Atlanta is a hot spot. Then again, I think I read that Atlanta has the busiest airport in the world, or one of them, so the office market may hold up better there in terms of folks who travel and want temporary office space.
Q and A: Norman Fox on Latest Trends in Executive Office Suite Space June 9th, 2009 at 9:44 am
[...] part one of this two-part Q&A, aBetterOffice.com sat down with Fox to discuss the latest trends in space [...]