Office Space News
Citizens Business Center continues expansion in 2009
Published January 6th, 2009 by Mike Sullivan
Jennifer LeClaire recently wrote about Citizens Business Center’s (CBC) expansion in northern California and the regional manager, Michelle Langford, commented on our site about their plans to continue expanding. I decided to give her a call to discuss.
Normally, a small executive suite company’s plans to expand wouldn’t necessarily be on the top of the news items here at aBetterOffice, but 2009 is no normal year. Any type of significant business expansion, especially when it involves real estate is interesting.
CBC is a family owned company that has been involved in real estate for decades, and a few years ago they converted one of their offices over to executive suite space. Since then, they have been looking for good opportunities. Fast forward to 2009, and good (great?) opportunities abound.
Rather than the floor lease model, CBC owns its buildings – having the capital to own your own buildings during these lean times is one key to having a better chance at success. With a floor lease model, it would be very difficult to get occupancy ramped up at sufficient rates to come anywhere close to covering lease payments. However, companies with capital who find opportunities in distressed or foreclosed real estate can position themselves for a solid future. Langford confirmed this notion, saying that there were many “opportunities in the Central Valley.”
CBC is opening a small center in Rancho Cordova with 4000 square feet and 18 offices, but this will be a bit different from the typical fully serviced office space model. “With that small space, and the fact that companies are looking for bargains right now, we decided the ideal scenario for our Rancho Cordova office was to be ‘managed space’, in which clients can get an office with furniture and internet connections, but phone, phone lines and phone answering would be extras. This helps us keep our prices down.” Langford went on to explain that “what we found is clients in this area often do business using their cell phones and didn’t necessarily want another phone, nor someone to answer their calls. This worked for us because it’s difficult to staff a small center with only 18 offices and provide a good price structure to our clients.”
In February, CBC will take over the management of Stone Point Executive Suites, and eventually own the center outright. Unlike the Rancho Cordova location, this would be a traditional executive suite yet still fairly small at 12000 square feet and 35 offices. Langford says that more opportunities are opening up, including a promising one in Stockton, CA.
In order to make a smooth transition at the Stone Point center, CBC is planning on having an open house – a “get to know Citizens Business Center”. The clients there have numerous concerns with the transition, and “not surprisingly, they are concerned with rate increases more than anything else”, said Langford. CBC wants to have an open discussion with them about the numerous changes they will be making to improve and add services, and to assure them that rates will not be increasing in the short term. “Our current focus is geared around being flexible for our clients to keep our rates as low as possible during these trying economic times”, explains Langford.
She also added that “we plan to highlight different perks to being a Citizens Business Center client such as using any one of our three locations for meetings (conference room, day use offices, etc.) free of charge.
We’ll keep watching CBC and provide any interesting updates, and aBetterOffice wishes them luck with their new openings!
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Rob Zeus January 7th, 2009 at 5:47 am
Talk about timing! This serviced office company is smart in lean times. Opportunities do indeed bound in the Central Valley of California. But that’s not the only market. Other executive suite companies with cash reserves can learn a great strategic lesson from Citizens Business Center on how to leverage the market. Owning the buildings rather than leasing the floors give CBC the flexibility it needs to become an even fiercer competitor in its region.
Melanie Jones January 8th, 2009 at 4:35 am
Langford tapped into a key marketing philosophy during economic downturns: keep your prices as low as possible. The second tenant in that stream is: communicate that you are keeping your prices as low as possible. That’s just as true for office space as it is for cereal. I am impressed with this serviced office provider’s timing, strategy and moves to reach out and communicate.
Elizabeth Sanchez January 9th, 2009 at 5:41 am
I think this open house for Citizens Business Center is a brilliant idea. This is the perfect opportunity to educate the local market on serviced office space and all its benefits.
If seeing is believing, this should help people who are looking for alternative office space get a good grasp of what it’s really like to work in a serviced office.