Different Types of Office Spaces Companies Can Use in Hub & Spoke Models

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We’ve already written about Hub & Spoke on this blog. But in case you missed those posts, let’s review.

When a company uses Hub & Spoke, they have employees who work in two different kinds of locations:

- In a hub, which is a central company location.

- In spokes, which are secondary locations like employees’ homes, satellite offices, borrowed offices, special secondary working spaces that the company leases, or anywhere else.

Why Call It Hub & Spoke?

There’s a fairly obvious reason why this arrangement is called Hub & Spoke, but let’s explain anyway.

You’ve seen bicycle wheels, right? They have a hub, which is the wheel’s center. They also have spokes, which are wires that radiate out from the hub. You’ve got the idea. (For some reason, this concept hasn’t been extended to include the rim or the rubber tire or the road, but we won’t explore why today.)

So, What Kind of “Spoke” Office Spaces Can Your Company Use?

In a recent video, KettleSpace’s Dan Rosenzweig and Josef Katz discussed options companies can consider when they pick their Spoke spaces.

You Could Use Underutilized Commercial Space

A lot of underutilized commercial space is worth your consideration for use as satellite office space – in other words, Spokes. This kind of space is underutilized because it is partially or completely unoccupied, possibly because of the Covid-19 business slump. It is therefore not creating any income or value for the company that owns or leases it.

It could be retail space, which is generally at ground level and which tends to be relatively expensive. Or it could be office space, which it usually upstairs on higher floors, and which is less expensive per square foot.

At KettleSpace, some of our favorite underutilized assets tend to be in hotels (which generally have peak usage times early in the morning or overnight), in restaurants (in mornings or afternoons for eateries that open only for dinner, or even late at night), in event spaces (weekends or any time they have not been reserved), and in multi-family residential spaces, which often have beautiful, unused spaces.

If you are an owner of one of those spaces, you have the opportunity to create a new revenue stream by tapping into the latent demand from people in your vicinity. And if you are a company that needs space, you can find and utilize many different kinds of spaces, often beautiful and unused, that are in your area.

Unused Space in Office Buildings

There are a lot of “moving pieces” to consider. And using empty office spaces can be tricky because office leases typically span several years. That can create a lag in when those spaces become available if you want to rent one. It can also make lease-holders eager to rent space they are not using in order to generate revenue.

There has been a lot of subletting going on, which creates revenue opportunities for existing, lease-holding tenants. At KettleSpace, we have been contacted by companies that have told us, “We used to have 100 employees who came to our offices every day. Now because of Covid-19, we have only 25, so we no longer need 75% of our space . . . we’re still paying rent for the whole space, can you help us derive revenue from that unused space?”  

Restaurants, Hotels, Event Spaces

These spaces are generally public and therefore less appealing to companies that want to establish Spokes. However, some spaces in hotels are physically set apart and can work well.

A hotel lobby, although it is big, can generally not be made fully private. But hotels also have conference rooms, private dining rooms and even wine cellars. (Which are an option in many restaurants.) Also, suite-like private rooms in hotels can lend themselves very nicely for small business purposes. You’ll pay a little bit more but get private access.

And a hotel can rent you a conference room for a month and you can use it for a company Spoke office.

KettleSpace is currently working with a number of New York hotels to provide this . . . small rooms for small groups, bigger rooms for groups of 20 to 50.

It Starts by Assessing What You Need

Consider your goals for your Spokes . . . are you trying to reduce current costs, provide flexible options for your employees, give employees in another city or region an attractive and cost-effective place to spend their workdays . . . or to accomplish something else?

Why not contact us and talk things over?  

Learn more about the Hub & Spoke Office Model

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