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Space as a Service - Structure Tone
From sit-stand desks to changing the way the world thinks about coworking—join us for a pre-pandemic discussion between Joseph Cribbin, president of Structure Tone Southwest, and Jeff Lamb, president and COO of Vari, a Texas-based company that’s redefining the workplace, one space at a time. Since the interview, the way we interact with the built environment has changed drastically, making Vari’s commitment to offering space as a service as relevant as ever.
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Space as a Service

Space as a Service

From sit-stand desks to changing the way the world thinks about coworking—join us for a pre-pandemic discussion between Joseph Cribbin, president of Structure Tone Southwest, and Jeff Lamb, president and COO of Vari, a Texas-based company that’s redefining the workplace, one space at a time. Since the interview, the way we interact with the built environment has changed drastically, making Vari’s commitment to offering space as a service as relevant as ever.

HOST

Joe Cribbin

President, Structure Tone Southwest

View Bio

GUEST

Jeff Lamb

President & COO, Vari

View Bio

Narrator:

Welcome to Building Conversations, a construction podcast powered by the STO Building Group. Today, we’re sharing a conversation we recorded pre-pandemic between Joseph Cribbin, president of Structure Tone Southwest, and Jeff Lamb, president and COO of Vari, a Texas-based company that’s redefining the workplace, one space at a time. Since then, where and how we work and the way we interact with the built environment has changed drastically, but Vari’s commitment to offering space as a service is as relevant as ever. After over a year of remote working, Vari offers unique workplace solutions and much-needed flexibility in the rapidly evolving landscape of the office.

Joe Cribbin:

I’m Joe Cribbin, president of Structure Tone Southwest. I’m pleased to have with me today, Jeff Lamb, president and chief operating officer of VARI – welcome Jeff.

Jeff Lamb:

Thank you, Joe. Glad to be here.

Joe Cribbin:

Jeff, VariDesk has a unique origin story. Can you tell us how the company came to be?

Jeff Lamb:

We do. Thanks Joe. Our beginnings happened at another company called Gemmy. Our co-founder, Dan, uh, was running a very successful product company. He eventually had developed some back pain, went to his physical therapist. She said, if you feel better to stand up, stand up more. So he was working off of a cardboard box. A lot of people have heard this story, but he called his president, Jason McCann, our other co-founder in, and our chief designer, David and said, you know, this desk I ordered came in a million pieces, this standing desk, and it was very expensive. You just want something that is fully assembled, you can take out of a box and it goes up and down. And that’s, that was kind of the birth of the VariDesk. It happened about the same time as Mayo came out with the article that sitting’s the new smoking and it really helped us to launch a company. VariDesk was born seven years ago and took off – fastest growing company in DFW. Over 3 million products sold around the world to 120 countries and 98% of the fortune 500. But as our demand from our clients for other products grew, uh, we really expanded into the full line of office furniture from electric desks and conference tables to our equipped-flexed, mountable walls and halo lights. So as our full office workspace solution business grew and grew, we started testing it in Las Colinas with a building we acquired – VariSpace Las Colinas. And so now, we had two complimentary businesses, uh, and needed a new brand. And so we’re recently rebranded to VARI. And so the VARI company offers flexible workspace solutions, as well as various space which provides short-term flexible space for tenants looking for a great place to work.

Joe Cribbin:

What inspired VariDesk to create a new work environment? Did the success of other flexible workspaces lead to this idea or give us some sense of how that came about.

Jeff Lamb:

Certainly. So you know, when you introduced me as the president of VARI, uh, that, that itself was a little bit new for us since we’ve just rebranded from VariDesk to the VARI. And we knew that when we got into the furniture world, the industry itself was a little antiquated. There wasn’t a direct-to-consumer provider. Like Tesla provides cars direct, everybody went through the dealers and we had such demand for our, our ancillary products as we began manufacturing monitor arms and chairs and, and file cabinets and eventually launching our full electric desk in March of 2018. So our workplace solutions is really a, an extension of where we started with VariDesk. And now we’ve, we’ve taken that even further as is, I’m sure we’ll talk about into the office world. And so VARI is a, is a company that now has great products like the VariDesk but also our full line of flexible office solutions as well as office space to lease it VariSpace.

Joe Cribbin:

So tell me more about VariSpace and what you call this “space as a service” concept.

Jeff Lamb:

I’m not sure, Joe, that we coined that term “space as a service,” but it fits. Uh, so we offer space for lease. Our first building that you guys have done such a marvelous job helping us renovate, uh, has been 90% leased before construction’s complete. Tenants range from 20,000sf to 200,000sf. So our offering really is to enterprise-level users. You know, it’s not coworking. People get us confused because of the rapid rise of flexible workspace in the marketplace. Uh, but we don’t, we don’t lease it by the desk. We, we put traditional demising walls up and lease out the space that you can brand and customize and have as your space. But we offer it fully furnished and uh, terms is starting as, as short as three years. And that’s really given us an opportunity to expand our flexible workspace solutions business, everything you need for your office. So, uh, we’ve been able to test and learn from new products, it helped us launch our new soft seating line, uh, other ancillary products to complement our full office line of solutions.

Joe Cribbin:

Do you find there’s a great demand for this type of office space and can you elaborate a little further on how you differentiate yourself from the other coworking-type environments that are out there?

Jeff Lamb:

Well, we’re certainly more cost effective than the other enterprise coworking, uh, companies. Uh, and uh, that that’s a key to it. But I would say there’s several things. One, the, the demand is been, we’ve been incredibly blessed with great interest in, in our first building, VariSpace Las Colinas, and now our second building, VariSpace South Lake, both here in the DFW metroplex. And some of the key drivers are high growth companies that just really don’t know where they’re going to be five, seven, 10 years from now that are looking for short term offerings. Uh, other large enterprises want the ability to have some flex space in particular companies are looking to create workspaces that elevate their people and their culture, which aligns with our mission. And so by creating not just an office building that’s fully furnished with our flexible products, but we layer in world-class amenities, hospitality through additional community managers and culture ambassadors and events within the various space buildings. It really helps us to create a place where people want to come to work. It builds a sense of community where tenants are going to want to stay. The number one thing, and Joe, I’m sure it’s this way with you that we hear from CEOs, uh, touring our buildings is that there’s a battle out there for talent. Attracting talent, retaining talent is by far the number one issue, uh, that we hear from our clients. And using your space as a place to attract and retain is become more and more critical as there’s been a flight to quality and a flight to flexibility among the office world.

Joe Cribbin:

So I’d like to discuss this amenities piece a little further. Uh, with your tenants having short term leases as you mentioned. So with a constantly changing tenant base over the years, what’s your philosophy and how you approach the amenities piece? Because one size doesn’t always fit all, as you know.

Jeff Lamb:

Right, well we think that the flexibility of a short term lease is really an advantage, not a disadvantage to keeping the building full. Uh, so from an asset owner standpoint, and we’ve had a number of asset owners, uh, approach us about the success of VariSpace and we’re happy to share everything we know, uh, it allows you to get, occupy the space or the speed delays is much faster. Uh, when you limit the use of hard wall construction within the tenant areas. Amenities is almost a permission to get in the game requirement now for quality buildings because if it’s a large enough building, you really need the high-end cafe food quality where people can stay on site, they’re more productive if they can walk downstairs and get lunch. Uh, we love the fact that we energize our lobbies. So we have coffee bars in the lobby, music playing high energy and it allows for employees to be able to pop downstairs, get a nice latte, go sit out in a beautiful courtyard, check their email on their laptop with our WiFi enabled outdoor spaces. And we’re also building fitness centers, onsite fitness centers in both buildings. One’s 10,000sf and the other one’s 9,500sf with lockers and towel service and those kinds of amenities. I think it’s kind of a part of the, the campus, but uh, really putting a lot of effort into the outdoor space with walking trails and covered areas so that people can both work inside and outside. In essence, you know, people like to work from anywhere. We try to create a place where they can come to work and work from anywhere within the office.

Joe Cribbin:

I see. Is the process of designing and fitting out and building out the VariSpace product different in your opinion from traditional office face? And if so, can you kind of expand on that a little bit for us?

Jeff Lamb:

Sure, the Las Colinas project for us was a little bit of a proof of concept in that we had some ideas about tenant improvements being done, a little different. I like to call it evergreen tenant improvement because a lot of what we do, once you do it, it never has to change with polished concrete floors and open ceiling with, lights or halo lights that you can plug in to the ceiling and reconfigure, add lights or take away lights. As your business ebbs and flows, the office ebbs and flows with it. So yeah, we tried some new techniques and most of them we feel like are something we’ll stick with and we’re using to get in South Lake. I think that’s probably the biggest difference between what we’re doing in traditional is, is that by limiting the amount of sheet rock walls and using our demountable quick flex walls that allows us to reconfigure the space for our tenants as their needs change. But it also allows us to, to repopulate the floor once the tenant leaves much faster than traditional demo and, and, uh, renovation of the floor.

Joe Cribbin:

So after transforming the Zales building in Las Colinas VariSpace, you mentioned taking some lessons learned to the South Lake project. Are there some things you’re going to do differently from your proof of concept?

Jeff Lamb:

Yeah, so the Zales a former headquarters of Zales jewelry, which we call VariSpace Las Colinas, uh, was a single tenant campus. And, um, as you know from us working together in the past at Southwest airlines, I’ve renovated single-tenant buildings for a single tenant. I’ve also had experience renovating, uh, multi-tenant buildings for multi-tenant use, but I’ve never had the experience of converting a single tenant to multi-tenant. The amount of efficiency that you lose, uh, that we lost in Las Colinas, we’re conscious of in South Lake. So it’s, it will be a much more efficient building in South Lake in terms of rentable square footage. I think one of the other lessons learned was to check the number of freight elevators because when you demo out crosswalks between buildings and you don’t count the freight elevators, sometimes you don’t have any way of getting freight to those floors. And so we checked, made sure we had plenty of freight elevators to service the building. And that was kind of one of our lessons learned, if you will, in in Las Colinas.

Joe Cribbin:

Okay, very good. And so what has been the reaction from the public, from tenants, from potential tenants, asset owners to this, concept that you’re bringing forward.

Jeff Lamb:

You know, positive enough that our, our ownership decided to invest significantly in a second 400,000sf building. Uh, you know, the proof is really in the, the leases that we’ve signed. But beyond that, you know, we, we would like to fill up South Lake as quickly as we filled up Las Colinas. Anecdotally, Joe, I’ll give you one story. You know, I had a, a fortune 50 company call and said, I don’t, I don’t think anybody can meet these requirements, but I need 50,000 to 120,000sf to expand. I need it in 60 days and we want a three year lease, fully furnished with 71 parking, 71,000sf parking. And I was able to say, we can do all that. And so that, that I think we’ve got a niche in the market where if people are looking for short-term leases, fully furnished with high end amenities, great hospitality, and parking to support the density levels that they want for their workforces, we can deliver it and we deliver it fast. I love the fact that we can help companies grow where they don’t have to relocate or sign a new lease, you know, and try to sublease old space. We can really meet their needs and, and that’s, that’s who we’re, I think appealing to most right now are fast growing companies, uh, small, medium sized companies that are looking to grow their businesses and large companies that need flexible space for short term periods.

Joe Cribbin:

So you’re solving a unique estate challenge. that’s out there definitely. Where do you see the whole concept of flexible office space heading in the future?

Jeff Lamb:

Well, it, almost, everything you read now in the real estate world says that the single digit flexible office space will go to 30%, 40%, or greater in the future. You know, we feel like, again, the, the office furniture may have been a little antiquated. The office space world is a little antiquated as well. It seems illogical to take 15 million tons of sheet rock every year and put in the landfill mostly through just renovating interiors of office buildings. Nothing against the, the sheet rock, uh, industry. But by using walls that can be used over and over again, you’re able to turn the space much faster. And that’s, I think that’s what we’re hearing from landlords and asset owners all over the country. If there’s some way to help them when tenants move out, when they outgrow the space or whether they decide to relocate or move, uh, how can we reduce our cost and speed the time to get a new tenant in? And, um, so our proving ground, if you will, has really, come to fruition as we begin to turn tenants after their first lease is up to be ready to move somebody else and very quickly.

Joe Cribbin:

So is incorporating some WELL building practices or green building practices, is that part of your goals for this product?

Jeff Lamb:

Yeah, I think absolutely. You have to take kind of each building individually in the, in the market, you know, so we’re, we’re certainly looking at having a long-term view towards owning VariSpace. So we’re doing things like upgrading the glass and the energy systems in the roof, which are common sense items. But I think beyond that we’ve learned from other clients how to create a work environment, a culture that will attract people, that will be a winning culture. So things like biophilia, we’ve got a tremendous number of, of live plants within VariSpace Las Colinas, and um, healthy options in our cafes. And the fact that we’re really focused on the fitness experience. A lot of people like our standing desk and our active workspaces because it does lead to, uh, a healthier and happier workforce. And so all the criteria for a WELL building, we take into consideration in, in all of our decisions around making filtered water accessible to everybody in our common areas, uh, to the outdoor walking trail.

Joe Cribbin:

Very good. Um, I know we have focused on a couple of major projects in the Dallas Fort Worth region. Is there a plan underway to expand nationally?

Jeff Lamb:

Well, I think the, the answer to that question is probably to be determined. Uh, you know, we, we’ve been fortunate to find a couple of, uh, locations here in our own backyard that fit, uh, our model, if you will, from a standpoint that they had been vacant for a while and were somewhat in distress. So it allowed us to, uh, acquire the properties and make the tens of millions of dollars of investment to bring them up to Class A, highly amenitized space that would complement our workspace solutions product. Uh, we’re expanding nationally from our full line of office furniture with sales offices in seven other major markets right now. If there was an opportunity to acquire a building or partner with an asset owner in those markets, we certainly be interested.

Joe Cribbin:

So what’s the future look like, Jeff? What’s next for VariSpace?

Jeff Lamb:

Well, right now we want to fill up our new building and in South Lake. We’re happy that a Structure Tone is helping us with that construction and remodel. And we planned to be open for business July 1 and hope to move our first tenant in there and fill it up soon. We, you know, the city of South Lake has been very supportive of our acquisition of the building and we rebranded it to the VariSpace South Lake to uh, call out the location there on 114. I think from a operational standpoint, yeah, we’re looking forward to all of our tenants moving in that is signed leases in Las Colinas and do a great job of providing hospitality to them. One of the great things about the complimentary businesses for us is that there’s a lot of people that will walk through, uh, our headquarters building and see our, our furniture products. Walk through space that some of our clients have installed our full line of workspace solutions and want to go see it in a, in a different environment. And we can take people on tours through VariSpace Las Colinas or VariSpace South Lake, and let them see how they can customize their own workspace to fit their cultures using our products. And so we’re looking for great things in 2020 is as we grow all of our lines of business and the way that they complement each other.

Joe Cribbin:

Well, Jeff, we want to thank you for allowing us to be a partner and helping you on this journey, and we wish you continued success with the VR space product. Thank you very much, junkie.