A common question in today’s commercial real estate market for employers and employees. Will I get better results with a virtual office or a traditional office? Read below for some insights.

I’ve done it all … from an office perspective.  As a small business owner I’ve had both a virtual office and a traditional office.  In the corporate world I’ve worked in a traditional office environment and have had a combination hybrid virtual-traditional solution.  As a small business owner the advantage of a virtual office is cost savings.  In the corporate world in which I worked there were no savings to the company at all.  There were advantages and disadvantages to each.

Herewith my partial list of the pros & cons of virtual and traditional office space:

Virtual Office Advantages:

• Greater flexibility.
• Reduced company real estate costs.
• Less office furniture and equipment needs.
• Lower corporate energy costs.
• Can recruit qualified employees from a wider pool of candidates.
• Improved employee satisfaction.
• Company can be “green” by reducing commute miles for employees.
• Teams spread throughout a territory don’t require offices – see #1 above.

Virtual Office Disadvantages:

• Increased telecommunication & network expenses.
• Virtual companies may require collocation or data center space – offsetting real estate savings.
• Network infrastructure is more expensive to set-up and maintain.
• If providing individual equipment, the company loses economies of shared office resources.
• Employees are potentially less productive.
• Employees are frequently less dedicated.
• Interaction between team members is greatly reduced.
• Employee friendships and company loyalty are harder to establish.
• Employees have higher expenses for home office space, equipment, and electricity.

Traditional Office Advantages:

• Lower total office equipment costs because of shared resources.
• Lower telecommunications costs due to economies of scale.
• Network expenses are less.
• Network security risks are reduced.
• Employee interactions are improved.
• Employee camaraderie is enhanced.
• Close communication makes it easier to respond to customer needs.
• Greater idea sharing results in improved practices and outcomes.
• Team cohesion is greater – improving friendships and company loyalty.
• Company can more effectively monitor worker productivity.
• Employee training and team integration is better.
• Reduced employee turn-over.

Traditional Office Disadvantages:

• Higher real estate and energy expenses.
• Harder for company to quickly expand or contract based on current market conditions.
• Increased office furniture expense.
• Employees come from a more limited geographic area – limiting potential pool of workers.
• Longer employee commute times.

Each business must carefully evaluate its unique situation and the pros & cons of each office solution. A visit with a commercial real estate broker will be helpful in making the right decision. If you’d like to talk to the DFW Real Estate Guru click the link below.

An early termination clause or break clause is a great benefit to a tenant, but an extreme negative to a landlord.

A couple of interesting articles provide more insight into the subject.