Thanks Jerome, I didn't know about restaurants and hotels for those lease lengths, that makes sense and is helpful to have perspective. I think I'd be happiest right now with 17 years total (including free rent, and including various benefits in the lease for length) and less would feel slightly stressful and more would feel slightly heavy.
Liz, the most I've heard of for a place getting crowdsourced contributions for a building purchase or improvement in Portland Oregon is $25,000 and $50,000, and the rest from banks. I think in a few years we would be able to do $2.4 million from members to buy a building, but I don't see how that would benefit us as a community compared to leasing or loans, since members would want individual benefit to outweight risk and reward compared to (or similar to) their best alternative options. We're part of the US Federation of Worker Cooperatives and the vast majority of building purchase capital of our sister organizations comes from banks. (At least in my limited knowledge on this.) We've always had 100% of our financing be from members and visitors (which until recently included meetings). On Monday, May 1, 2017 at 8:52:13 AM UTC-7, Jerome wrote: > > Restaurants will sign for 20-25+ years. > Hotels might lease for 50+ years, as they do not always own their own > buildings. > Anytime where the location is critical, as in business cannot transact > elsewhere, you’ll want to stay put. > > In these past 5-8 years, I can completely sympathize with itches to lock > in lower rates, as rates have only gone up. But cycles do happen, and this > bull run has been some 8+ years. I would say that building ownership is > only for those with iron stomachs, or those like you, who are committed to > staying put with one particular building for a long time. This is no > different than those who own vs rent their homes. > > Be careful re:sublease. Landlords can sometimes require that they get 50% > of the sublease rent increase, which quickly evaporates any profit you > might take. And then as the sublessor, you effectively become a landlord, > without any of the perks of being the landlord. > > Having more locations is like having kids: each has its pros/cons. You > just hope the average is better, and/or one’s pros more than compensate for > the other’s cons. > > > *JEROME CHANG* > > talk to us: (323) 330-9505 > chat w/ us: http://www.BLANKSPACES.com/chat <https://lc.chat/now/7173741/> > > *WEST: Santa Monica* | 1450 2nd St (@Broadway) > *CENTRAL: Mid-Wilshire* | 5405 Wilshire Blvd (2 blocks west of La Brea) > *EAST: Downtown* | 529 S. Broadway, Ste 4000 (@Pershing Square) > > On Apr 30, 2017, at 8:27 PM, Alex Linsker <[email protected] > <javascript:>> wrote: > > What's the longest lease for a coworking place or other businesses that > you know of that works well? Anything 15 or 20 years or more? > > Context: > > After getting paid to do this for 6 years, and having experimented with > not actually leading coworking for a portion of that, I can see doing it > for 50 more years or my entire paid work, whichever is more. > > Why not buy: I don't currently personally have resources to buy a > multi-million dollar building, and we're not yet where I see us buying a > building as a group, and I (and most members) see us growing into multiple > locations, so we could always buy buildings in the future. > > Why not do a shorter lease: When a lease ends, my sense is that rents go > up, and in Portland Oregon, rents have gone up quite a bit and seem to be > on track to go up quite a bit. I haven't found owners would would put a > renewal option into the lease other than to renew at 'market rate' which > isn't really a renewal option. > > The plus to a shorter lease could be that the business model is revised in > 5-7 years (moving out totally benefited us after 5.5 years at our first > location, when we moved to two very different locations), but right now we > are doing well with the current business model, and while I see how that > could change, it doesn't seem likely. > > So I could see a longer lease being better than a 5- or 7- year lease. Do > you know of businesses, or coworking places, that have signed long leases > and enjoyed that? The longest I know of for coworking are 12-year leases, > and that seems like it can work great; I know one company where it makes > total sense. I could see doing a 15- or 20- or even longer lease, with the > option to sublease or assign the lease. I've heard of one big retail > company that does 75-year leases, which seems too long to me, but where I'm > at right now, I could see between 15 and 20 years feeling good. I could > also see doing 7-year leases, and renegotiating or moving every 7 years, > and having rent go up 15% every year until we hit peak, whenever that will > be (I don't think we will for at least 15 years). > > A related question is risk management; if we have 2 venues now and grow to > more, what are the risks of growth and other risks (obviously not growing > too fast or overcommitting -- which could be what a too-long lease does -- > but under-committing seems to be what a too-short lease does, so it seems > to balance out), and how does one balance that. > > Would love your perspectives and hearing about your own experiences. > > -- > Alex Linsker | Business Owner > Collective Agency <http://collectiveagency.co/> > (503) 517-6900 office | (503) 369-9174 mobile > 3050 SE Division, Suite 245 | Portland Oregon 97202 > 1410 SW Morrison, Suite 850 | Portland Oregon 97205 > > -- > Visit this forum on the web at http://discuss.coworking.com > --- > You received this message because you are subscribed to the Google Groups > "Coworking" group. > To unsubscribe from this group and stop receiving emails from it, send an > email to [email protected] <javascript:>. > For more options, visit https://groups.google.com/d/optout. > > > -- Visit this forum on the web at http://discuss.coworking.com --- You received this message because you are subscribed to the Google Groups "Coworking" group. 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