With more coworking and flexible work spaces opening and more real estate landlords taking an interest in the coworking scene, there are big opportunities for partnerships.
The format of these arrangements can vary but typically the parties will enter a Joint Venture agreement whereby profits of the venture are split between operator and property owner.
Advantages for the Operator:-
1. The Capital required to launch the space can be shared.
2. With the absence of residual rental obligations or personal guarantees, the impact of a failed operation is minimised.
3. With less risk, the operator will find it easier to obtain finance which can be diverted into better fit out and enhanced operations.
4. Avoiding the renal and commercial lease process means that the business can get off the ground faster revenues accelerated with a cash flow positive position coming sooner rather than later.
5. The Owner can build in flexibility which will allow for a change to the property at short notice should an alternative opportunity arise.
6. If the operation is a success, the owner will see a much higher return than a rack rent.
7. There can be tax benefits in terms of the tax treatment of the revenue from the venture.
8. For larger landlords successful relationships can grow to other locations.
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