You pay as you go with virtual office

Business centers provide services and space for home businesses and road warriors.

Register writer
Anthony Johnson has started three businesses in the past three years. The services of the three companies are done at customers' homes or offices around the country.

Johnson's 40-some employees and hundreds of independent contractors work from their homes.

Why pay thousands of dollars a month on a long-term office lease?

Instead, Johnson's companies – Atrium Solutions, which does corporate document storage; Digital Storage, a photo scanning service; and Flipside Partners, management consultancy – have virtual offices in an Irvine commercial complex.

Unlike virtual reality games, virtual offices are physical places. It's just that tenants don't stake out a permanent presence there. They get mail delivery, phone answering, use of equipment and conference rooms on a pay-as-you-go basis. They don't pay for services or space they don't use.

The concept – a subset of what are called executive suites or office business centers - appeals to home-based business owners, traveling sales personnel and telecommuting employees far from corporate headquarters.

Johnson's business address is Palm Court, 15615 Alton Parkway, suite 450. It is managed by New York-based Synergy Workplaces, which has 26 such business centers nationwide.

Most of Synergy's tenants are small businesses or corporate employees who rent a specific office within the center. But a growing part of the business are people such as Johnson who come maybe once a month to use conference room to meet with local staff or use the fax machine or copier.

Prices start at $75 a month for mail service, $300 for eight hours use of a conference room, said Synergy spokeswoman Laura Kozelouzek.

Johnson came to Synergy through Davinci Virtual, a Utah-based company that specializes in virtual offices at its own executive suites and in partnership with companies such as Synergy.

In all, Davinci markets 600 virtual locations nationwide, said Chief Executvie Bill Grodnik. Its call center, which provides live receptionist service for all its customers regardless of location, is in Salt Lake City.

Davinci's phone answering service starts at $149 a month; use of a physical location starts at $95, Grodnik said.

Johnson can have his calls forwarded to his cell phone wherever he is traveling and receives voice mail by e-mail.

"When I worked for IBM, they had people working all over the United States, many of them from their homes for flexibility; this is the same," Johnson said. "I get the personal touch of a live person answering my (company) phone, and I get a professional look if I meet with clients there. But all my work is done at clients' location. We are able to save thousands of dollars a month."

This virtual approach is increasingly common because of telephone, computer and Internet technology.

"Most office projects in Orange County have at least one executive suite," said Steve Lane of Voit Commercial Brokerage in Irvine.

There are more than 4,000 office business centers in North America, another 4,000 worldwide with the biggest growth in Central and South America and Asia, said Troy Fabish, president of the Office Business Center Association International, a trade group.

"In the United States we called them executive suites but when we went international the Europeans didn't know what that term meant, so we changed (the organization name) to office business centers, explained Fabish, who with his parents owns three centers in Ohio.

He, like many other such center owners, has started allocating a portion of his business to virtual offices.

"There's also something called 'touchdown space,' which is an open air cubicle that an individual can lease if he can't afford a full office," Fabish said. "Building owners create products based on client need."

Most office building owners won't lease less then several thousand square feet of space, Fabish said. An office business center can take a large suite or entire floor of a building and still accommodate a small business that needs and can afford only a few hundred square feet.

Then if that small business grows, it can become a regular tenant without changing its address or phone number, he said.

At the same time, regular tenants can benefit from extra services that an office business center provides, such as Internet security, Fabish added. "It becomes a building amenity."

However, business centers are a lot of work, added Nancie Sauer, who oversees Synergy properties in Orange County and around Southern California. "In the '80s, executive suites were going crazy and landlords thought they could do it themselves. But clients are very demanding."

Some individually owned executive suites went bankrupt, leaving the building owner with a big vacancy. Now it is more common for office business centers to be run by third parties that are nationwide companies.

While technology makes business centers and virtual offices possible, the economy is making them more popular. "Since January, the virtual office part of our business has grown 20 percent because of the economic downturn," Synergy's Kozelouzek said.

But commercial real estate expert Ted Snell, senior vice president of CB Richard Ellis in Irvine thinks there's more than money involved in that growth.

"Working from home was the rage a few years ago, but many people who did it found they don't like being in their house 24 hours a day. People miss socialization," he said. "Plus they find they're not as productive as they thought they would be because of all the distractions at home."

Sauer of Synergy agreed. "People come to us because they can't work from home. It's a personal preference. How do you work?"