As we all know, deals ‘fall out of bed’ all the time. The co-working project is just another one, having fallen through today.
Although, this one is a bit unusual as the reason it will not be going ahead is that the prospective landlord / vendor signed up another party to their site without any indication.
We had conducted a little over 2 months of due diligence, specifying our product, the scope of works required, JV partner relations, etc. including 3 site visits and then conducting competitor and market research.
So are there any lessons to learn from this? From a due diligence point of view, no. We had to do what we had to do. Perhaps we could have been a little quicker but then we needed to make absolutely sure of our project parameters given it was a new partnership and a new business.
From the point of view of conversations with the landlord / vendor, yes, we could have done differently and better.
We always consider good communication as essential in everything we do and perhaps, on this occasion, we didn’t maintain frequency of contact. Having arranged a meeting to finalise contracts just under 3 weeks into the future, we didn’t want to hassle the other party so assumed, and then found after 2 weeks the bomb was dropped. Perhaps a friendly weekly call may have prevented this from happening. We can’t know but we won’t be making any more assumptions in the future – so the lesson? – keep checking in regularly with the other party.
An opportunity has arisen to establish a new business centre in Harrogate encompassing co-working alongside regular offices.
We are currently exploring a partnership with an established provider to expand their brand into a new location in Harrogate.
Of course, there’s a long way to go – we need to research market demand, current competitor offerings and then negotiate the terms on the site we have identified. These things take time, especially when we are effectively setting up a new business. The business centre will be a stand a lone entity, in a partnership under a SPV Limited Company.
At the moment all our market research indicates this project has great potential. ALthough Harrogate has plenty of normal offices available to rent, there is a dearth of serviced offices and no co-working space readily available.
The co-living model is developing fast in the USA. There are new entrants all over mainland Europe. And now we see that a German company has secured €1bn to invest in 35 co-living properties creating space for 6000 residents over the next 5 years. The press release states that developments will be located in Austria, Spain, Switzerland and Poland. So what about the UK?
We believe there is another, more agile, way to bring capacity on stream more quickly. To start earning those returns and enable, fast organic growth. To rapidly respond to the changing customer demands. To create a quality, aspirational, socially and environmentally beneficial product accessible to many, many more potential customers. To actively expand the product reach and give local communities decentralised social and economic empowerment.
Properly delivered, co-living has the all qualities to empower genuine social and economic change not just in large cities but everywhere. It is time the UK committed to co-living in a BIG way with vision and ambition.
We have a fantastic opportunity to convert a commercial premises in Harrogate which we wish to use as a ‘flagship’ property supporting the establishment of a wider ‘co-living’ property investment business. We would love to speak with anybody who thinks they may be able to help me achieve ambitious goals and quickly scale the wider business to a national presence. We have a Business Proposal Outline for those who are interested.
The current property we have our eye on needs moving on very quickly -we would like to put an offer in as soon a possible, as it will definitely go! We have detailed spreadsheets illuminating a variety of exit options – which we are happy to provide.
We have development teams in place and with suitable experience, having most recently undertaken a 35 bedroom student development with a JV partner (now sadly deceased – therein lies a helluva story!) which we have held and are managing.
Although we are principally seeking a business partner, the current property in question has multiple exit options including planning underway for conversion to 7 flats which could be sold for GDV c.£935k, or held for use as single lets or SA. If it used for the wider business, any investment could be corralled in a project specific SPV with 1st or 2nd charge (dependent on purchase finance options) or invested in the business to enable the purchase and development of more than just this opportunity. Outside that business, we may be happy to assist in packaging it as a deal, providing you with any required range of services from simple sourcing to full development and project management to completion.
We are quite protective of the wider Business Proposal as we think there is a fantastic opportunity to exploit and actively expand the growing ‘co-living’ market. If you seriously think you would like to be involved in a co-living business that could really go places we would really love to talk with you.