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I'm looking to establish a presence in another U.S. city for my custom software business. I will need an office full-time for 1-3 months. After that, I can transition to a virtual office with just a few days on-site each month.

Regus sounds like the perfect solution, but I'm getting a distinctly oily vibe from them. A Google search turned up a lot of complaints about hidden fees in their lease agreement. On top of that, I've talked with several representatives over the phone and none of them will give any straight answers. They won't say anything about pricing or availability but instead pressure you to commit to a time-consuming sales tour of their buildings.

What traps do I need to watch out for when leasing from Regus?

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7 Answers

up vote 11 down vote accepted

I used to work for them. Here are a few tips:

1) Ask them to demonstrate everything they are offering you. In many of their sites, the internet service is quite poor. Ask them to test the speed. Ensure that no website are restricted on your internet connection.

2) Ask them to demonstrate to you their telephone system. Ensure you see how they will answer your calls & how your phone works. You will have to pay for at least 1 telephone line. Ask then to confirm in writing the best call rates. It costs extra to get an itemised copy of your phone bill. See if you can get them to include this in the negotiation process.

3) There is typically a beverage fee that is non negotiable. Along with a 1 or 2 month bond that is non negotiable. In many cases, see all the online tweets etc, they do not refund the bond, so be prepared to kiss this money goodbye at the end. When you leave, there is a fee to fix up the office. Ensure you get from them in writing what this fee will be when you exit.

4) Ensure that your notice period is only one or two months, to be safe. Give notice when you start in writing so that you don't forget. If you do not give notice your lease will roll over for the original period you signed for.

5) Read the lease, in full. Don't skip any clauses. Get in writing any amendments to the clauses. They do not honour any amendments made verbally. It must be in writing.

I would suggest from experience that you use a broker like www.instantoffices.com or www.officebroker.com. They will generally negotiate a tour for you. Always tour. You can then see what you are getting for your money; no smoke & mirrors.

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Should watch rates from local leases. So many time you could do better with a standard lease through a broker (versus full service) or a sublet. – Frank Jan 19 '11 at 3:24
up vote 5 down vote

Be very very careful with them. They will nickel and dime you to death. Do not sign anything beyond one month, even if it costs you more. You sign 6-month notice and you will lose any kind of leverage. I've deal with them before and I would rather never have to do that again.

Depending on where you want the team located, I would actually look around for companies with spare space. In places like Boston, Chicago, Austin, etc. there are plenty of SMBs who got really good leases plus took extra space in the down economy and have some spare. That is probably the best way to go.

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up vote 4 down vote

Watch out for their termination clause. After using a regus center in India for 1 year I decided to terminate given their dwindling service quality. Promptly gave them 2 months notice as per how I understood their terms. it turned out that I had to give them a 5 month notice on a 3 month auto renewing contract based on how they had set up their auto renewal!!!

They do have a smooth talking sales team who can put you at ease when you sign up. But that's where their professionalism ends! Would never recommend them to anyone.

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up vote 2 down vote

Yes

Read and negociate the contract. I had to paid for the service for 6 months after I shut down the office. I wasn't aware I signed for a 6 months notice. Noob mistake ;)

Contracts are different depending on the country you are registering an office. I'm talking about US office in the previous comment. Please note that there is much more cheaper alternative. Spend 1 or 2 hours searching on google, and you'll find many.

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up vote 2 down vote

Yes, just be VERY VERY VERY careful with their termination notice. Do month-to-month if you can and don't get locked into anything.

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up vote 1 down vote

I am not too sure if it is the same in every country, however, one of the things I found was that while space was reasonably priced, there were so many extra's that the price actually doubled. That said, in general I am quite satisfied with Regus and have two offices with them.

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up vote 1 down vote

The best thing to do would be to speak with someone like www.officebroker.com. They provide free help and advice to businesses seeking just this kind of space. The best thing I found was that they cover the market, meaning you will get access to the details of lots of office providers around the US. They were also able to turn things around quickly which helps get things moving.

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