Online platform Trot wants to fill a gap in the market: unused offices – Commercial Observer | Ad On Picture

The impact of the pandemic on coworking could be described as throwing it against the wall and seeing which concepts survived the impact and in what form.

BC (pre-COVID) basically had a form of coworking, a place where you could take your startup with you and mingle with other startups, although some coworking companies tried to offer turnkey offices. Then you saw more established companies trying to partake in the cool and looking for places for their people. Think IBM renting 70,000 square feet for a time by WeWork at 88 University Place.

AD (after illness) it seemed There were more concepts as a company. Busy, stressed out, turnkey space for small startups to call their own. There was Daybase, which provided spaces in the suburbs and commuter towns where satellites could take place—or where people who wanted to get out of the house but couldn’t make it all the way into town could go about their business.

Even the company that most identifies with the trend, WeWork, has changed with the times. In May, Peter Greenspan, global head of real estate at WeWork, said, said Trade Observer The company worked to offer a variety of products rather than one size fits all.

Here comes another variant of the flexible office product. Trot from Manhattan Founded in 2020 and officially launched in June, the company aims to be the Airbnb of offices, taking idle workspaces and placing them online in one central location for much shorter leases than typical commercial leases, which start around five years and can last up to 30 years to expire. Trot does not own or manage any offices. All it does is let the public know they are available.

According to a spokeswoman, 30 ads or about 41 percent of the total number have been set up.

Trot Founder and CEO, David Menaged, took some time out a few weeks ago to explain Trot and how it works. His comments have been edited for length and clarity.

David Menaged. Photo: Trot

Trade Observer: Tell me what Trot is and how it differs from other coworking companies.

David Menaged: Sure. Trot is an online marketplace. Humans can fully communicate with each other on Trot. These are owners and tenants and brokers with owners. You can also transact on our platform. All agreements are streamlined and signed on the platform; No papers will be exchanged.

It is a platform for owners to list their commercial spaces. Entries are free. There are pictures, there are plans. There are virtual tours of each of the rooms, full descriptions of them. And renters come – we call them trotters – they come onto the platform, they can browse the market, they can chat with owners, they can arrange personal tours of the premises they are interested in. And they can actually come back and sign licenses for the space for three-month intervals.

In how many markets are you active and in which markets?

Right now we’re strongest in New York City. We officially have one building, but there are a few more buildings coming up in New Jersey. At the moment we are mainly in New York City.

We currently have 20 buildings officially on the platform. We have another five buildings in the onboarding process where we are taking photos, plans and data points. And we have joint agreements with other owners for probably 20 buildings, but they are 10 different owners. Also New York City.

As I understand it, there is no actual brand trot space. In principle, these areas remain the landlord’s areas. So it’s different from WeWork. When you go to a WeWork, you go to a WeWork location. They aspire to be more of an Airbnb model.

That is very correct. We are an online marketplace where owners and users can transact in a way they have never done before. The current market out there that was delivered to the world, so to speak, was third-party vendors. It could be a room actually rented by the third party operator from an owner. Or it could be a company entering into a management contract with ownership. But these areas are branded as this operator.

Whereas with Trot we are not an office space solution per se. We are a digital platform where the existing players in the respective industry continue to do business as they have only done in terms of the structure of the transaction, but only in a whole new way that they have never done before to have.

And we’re really streamlining the flex industry. It keeps the power where it has always been, so to speak. This applies to owners, tenants and brokers.

Where do you see yourself in a few years, or at least where do you hope to be?

I hope that within two years we will be among the top 20 markets in the US and surrounding areas.

This is really a streamlined solution. So in terms of local infrastructure on site, there isn’t much for us to scale the model. There are some positions that we will need. But we never build a room. We never really set up a room. We actually rely on existing players to do what they do best, which is manage their properties.

So in terms of scaling, it’s really just about getting the word out and showing owners and tenants that this is the way they should be leasing short-term office space. Once that happens we hope and pray that this will spread like wildfire and we’ll be coast to coast in the top markets and surrounding areas.

How does Trot work and how do you make money with it?

We have a performance-based model. We do not charge for listings. We don’t ask owners to specifically submit their listings to Trot. That means they could continue to market with their agents for whatever long-term deals they currently market for, so completely undisturbed. And if a trotter comes on the platform and rents a place, we take a fee, which is 10 percent.

We believe that flex space and short term office space needs to be another tool in the owners shed.

How is Airbnb involved? It seems that you are applying an Airbnb model in some respects and some of your PR is actually saying so. So how do you compare what you do to what Airbnb does?

It could be Airbnb or one of the other platform companies that have revolutionized their respective industries. We hope to be similar to Airbnb in that it is a short-term rental space, be it vacation homes or apartments in any city around the world.

That brings it home because this is such a famous company. So by making this correlation we can show how we differ from the coworking operators that are currently on the market. How is Airbnb involved? I do not know. I hope I strive to be as successful as these guys. And as revolutionary as they are. I salute them.

You see a difference between flexspace and coworking. Talk to me about it a little.

Secure. So coworking is a kind of flex space. Coworking is your typical WeWork or Industrious where you walk into the space, the space is beautiful. They have their share of open spaces, they have IDs so you can invariably find people seated in the social areas, like in booths or in the pantry or somewhere close by. And they have this line of private offices. Although they come from different companies, in a way they are your peers because you are with them.

Flex is short-term space only. You have the flexibility to do what you might not have had the flexibility to do on a long-term lease that basically went on forever. So Flex really is a whole category I see.

Up to this point, there really weren’t any private suites. There have been some, but it hasn’t really exploded in the market – private suites on a flexible basis. And I think that’s the real growth of flexible offices because I think a lot of people out there still want their own offices. There are people who want to be in coworking places and it’s great to build a little social network; and maybe make friends after work, that definitely has an advantage. I am not saying here that this has no place in the market.

I just believe that the vast majority of people keep their businesses private and want to be in their own space.

So you see how the market is evolving, and it will likely continue to evolve.

I would say it’s not even the market it was two years ago. What everyone in the world has seen – and I think this is without exception – is that the world is changing in the blink of an eye. You know when it was maybe March 13th or 14th, 2020. And then on March 15 or 16 everything was different. So people saw the value of flexibility and the ability to turn on a dime. Whether it was people leaving cities that were heavily locked down to go to warmer climates like Florida that weren’t as locked down. Or whether it was companies that had the right to terminate their lease, so they had some degree of flexibility, unquoted quote, and not people stuck in a 10-year contract.

So, yes, the market has evolved and I believe it will continue to evolve. It’s just a sign of the times.

We may not be out of the woods yet. Interest rates continue to rise and there are a number of economists predicting a recession and a reversal of the low unemployment numbers we’ve been seeing. Do you see that the market for your company is going up? Or do you anticipate tougher times for your and other companies?

I think rough times just present their challenges. At any point in time there are challenges. From our point of view, we are a cost-effective company. We have about 200,000 feet on the platform and another 100,000 feet on the way. We can do very, very similar issues and we have a 2 million foot platform. So we don’t have these large maintenance bills and debts to service to transact with such a large pool of space. In terms of our business, I think it’s actually a very healthy model to get through challenging times.

In terms of business in general, I think it goes back to my first answer. I think every market and every economic situation that we find ourselves in has its challenges. They’re just different when the market is down, but they’re there when the market is flying high. It’s easy to get caught up in negativity when the market is bad. What I’m saying is that there are always challenges and always opportunities. I think some of the greatest opportunities are where the market is weakest.

This interview was originally part of the Tenant Talk newsletter. Please remember to register here.

Leave a Comment