Search for Space: Coworking Startup Talks Real Estate Hunt

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Val Geisler equates finding the space for her proposed coworking concept, The Hive, to the equivalent of a full-time job. The challenges she faces are many, and likely a familiar story to any business owner who has been through the space search. For other startups diving in, Geisler spares no detail of what the search has really been like.

“You don’t know what you don’t know,” Geisler says.

But first, an overview of The Hive, as the business concept introduces a few unique elements to what the ideal space looks like. A freelancer and a mother, Geisler found herself not in need of a typical daycare situation, but after something more part-time, more flexible.

“I had this thought like wouldn’t it be great if there was a place where I could take my daughter, and she could get what she needs, and socialization with other kids, and having people who are really passionate about children taking care of her” Geisler explains. “And I could be right there, where I’m in a separate space, able to get my work done, but I could pop in and see her.”

Thus the concept of The Hive was born – and it has been a dream years in the making. Geisler initially had the idea about two and a half years ago when she welcomed her first daughter. However, a solution presented itself in the form of a friend providing in-home care. But now pregnant with her second and facing a change from her provider, The Hive came buzzing back. And on a fast and furious timeline.

“I need this in the spring so that’s when I want to open it,” she says.

First came research, not only on concepts but the legal structure, where Geisler discovered the IKEA loophole.

“IKEA has daycare on site so you can shop,” she explains. “So as long as the parents are in the same building, you don’t have to have licensing as a daycare center in the state of Ohio.”

She researched various coworking concepts in other cities that included childcare. Some were geared towards moms, others were makerspaces, and some operated on a co-op model. Geisler envisions The Hive as family-centric: moms, dads – even those without kids are welcome – and childcare will provided by professionals.

Then it became a matter of where. A Clintonville resident, Geisler is looking in her neighborhood and central locations like Grandview.

“I would say that one of the biggest challenges is just knowing what to expect,” Geisler says. “A coworking space on its own is a very different business model than with the childcare element thrown in, and it really changes what we’re looking for with spaces, too.”

In such a setting, separation is key, and that comes with a higher square footage. In older, established neighborhoods like Clintonville and Grandview, more space comes at a premium – let alone with some of the additional criteria shaping the right fit for The Hive. Geisler wants lots of natural light, safe access to the outside for kids to play, multiple bathrooms, etc.

When it comes to finding space, “Doing an online search only goes so far and it’s really the personal connections and referrals that make the difference,” Geisler says. 

She began working with one broker, eyeing former retail spaces that could benefit from a customized build out…but The Hive is a completely bootstrapped operation. While a good jumping off point, she needed a broker that understood startups. Geisler reached out to Paul Proffitt at SunDown RunDown who connected her with Andy Effler.

“Andy has been really instrumental since then,” she says. “He just really educated me on what I didn’t know about commercial real estate.”

Effler and Geisler have gotten creative when looking at space for The Hive.

“To me, this concept makes the most sense in a converted residential unit that now functions as commercial space,” Effler says. “Having multiple stories would provide the right breakup in use to serve both adequately – office portion on the top level, daycare on the ground level with access to outdoor space.”

A home would have features like a kitchen and multiple bathrooms built in.

“That said, the converted residential concept could create a challenge all of its own, which is the ability to scale,” Effler explains. “Most homes don’t have an open concept on the second level.”

Geisler has been carefully weighing factors like square footage and lease length to find the right balance when it comes to a startup concept. First, she plans to pre-sell memberships to get a general idea of interest, which will steer the size of the space.

My biggest concern with a long-term lease is that growth factor,” Geisler says. “So if we open and have a 30-person waiting list, and we’re in a five to seven year lease, then we absolutely have to look at a second location.” 

The Hive has run into other a few other unique challenges when it comes to location. Some landlords are not interested in startups or children in their space. Effler explains why many startups typically come out on the losing end of a landlord agreement.

“For the most part, a landlord is going to look at three things when vetting out a prospective tenant,” Effler says. “They will take the tenant’s score, looking at the last two years of a tenant’s financial statements – if that is satisfactory enough to continue the vetting of a tenant, they will look at the industry code (NAICS code) and compare the tenant to their local and national competitors. Finally, they will look at the deal terms – base rent, tenant improvement costs and leasing commissions – to understand whether this risk is worth their time, investment and real estate. When they add those up, typically a startup doesn’t get a landlord all that excited, unfortunately.”

For Geisler it’s important to have a landlord that wants them in the building and is excited about the business. It has expanded her list of possibilities to include spaces like churches that used to have preschool programs. Maybe it’s not the space, but maybe it’s for the first year.

“For the vast majority of startups, depending on funding, the first space you take on, and sometimes your second, third space, is not going to be the grand vision you had in mind for your business,” Effler says. “And that in most cases is actually a good thing.”

Just like the vision of a business didn’t become a reality overnight, concepts can scale at different rates.

“That’s why we plant options when we negotiate your real estate to relieve the pressure points created when scaling a business,” Effler says. “My goal as your broker, your guide through real estate strategies and decisions, is to help you make sure you’re able to grow your business and utilize your capital to best serve your core business needs.”

Effler is one in Geisler’s army she’s recruited to help open The Hive.

It definitely takes a village,” she says. 

She urges business owners to surround themselves with experts in their fields. She has a friend on deck who runs a nanny and babysitter placement service to help with staffing on the childcare side. Effler for real estate. Women’s networking group Creative Babes has provided moral support and an opportunity to talk to potential customers about the concept.

Identify that thing you are really great at inherently and find how you can do that, and let everybody else do what they do really well,” Geisler says. 

The Metropreneur will be following along as The Hive develops from concept to open business. We’ll check in with Geisler as she find and creates her space and cover what The Hive has to offer at doors open. 

Follow along at thehivecolumbus.com