By Meghan Hall
The San Francisco Bay Area is home to a healthy mix of well-established, global companies and new local startups, each vying for a place in not just their area of service or expertise, but for office space in which to grow their companies. For many, flexible office spaces have proven a unique real estate solution in which companies are offered flexibility as they evolve and navigate the region’s competitive commercial real estate market. Montreal-based company Breather, however, is looking to offer solutions that go beyond the realm of traditional coworking and has found success in providing not just hourly or daily workspaces, but monthly office spaces that provide an alternative to traditional coworking.
“Flexible workspace is one of the fastest growing markets, and for great reasons,” explained Bryan Murphy, Breather’s new Chief Executive Officer, who was appointed in January. “I have been in the digital disruption business for 18 years, and as an entrepreneur and someone who has opened up and closed a lot of offices around the world, I immediately saw the value.”
Breather has expanded rapidly since its founding in August 2013; the firm — which considers itself a real estate tech company — has seen growth of 300 percent over the course of the last year and now operates more than 500 private, on-demand meeting spaces and offices in ten cities worldwide, including New York, Toronto and London. As of the first half of 2019, 110 of those spaces are part of Breather’s West Coast portfolio. Breather operates 70 spaces within the San Francisco Bay Area, and has added nine additional spaces in 2019 thus far, including 250 Sutter St. in the Financial District, 329 Bryant St. in South Beach and 650 5th St. in the South of Market neighborhood.
In its growth, the firm also appointed Mark Frackt as chief financial officer, Glenn Felson as chief sales officer and Ana Jamrosik Otto, Ph.D., as director of research.
Murphy attributes Breather’s success to the fact that it offers something different than traditional coworking spaces do. As opposed to hot desks, Breather offers private flexible workspaces in the form of conference rooms to full offices.
“One of the things that is interesting today, because you hear about it all of the time, is that there is now this spectrum of flexible work spaces,” said Murphy. “People always think flexible is coworking. Well, no. Coworking is a big and valuable segment of flexible, but actually I think the quickest part of flexible workspace is what we do, which is provide a hybrid solution of flexible private office and on-demand space.”
Through Breather’s app, firms and individuals can search for, discover, access and pay for a space.
“You can book from over 500 private offices and meeting spaces as easily as you can book an Uber, which is pretty remarkable,” added Murphy.
While some of Breather’s top clientele includes companies such as Lyft, Candid and Airbnb, and Murphy estimates that Breather’s clients are a 50-50 mix of enterprise and startups, the use of private offices is beneficial for newly-established firms, whose needs are ever-changing and for whom long-term leases or subleases can be costly.
“In San Francisco in particular, which is really an incubator of all types of companies, the key for startups and most CEOs is maximizing the efficiency of your venture capital,” said Murphy. “There is nothing worse in the world than wasting VC on direct or sub-leases, especially when these options are available to you.”
Additionally, stated Murphy, while coworking is great for short-term needs, there can be constraints for a company looking to establish itself.
“If I’m a business, there’s now a solution that really meets your needs depending upon your phase of growth,” said Murphy. “If I’m a startup with just a few employees, coworking is a great option. It’s super effective and relatively cost effective, but at a certain point you out grow it. There is no privacy, collaboration is tough, and culture can be really difficult to build there.”
Those factors, Breather has found, weight heavily on company owners looking to provide the best incentives to attract and retain talent.
“90 percent of our customers believed that Breather strengthened organizational ties and improved individual productivity, and those really are the pillars of performance within any organization,” said Murphy.
Last year, Breather received $85 million in Series C funding. While there is plenty of room for expansion in markets around the world, Murphy explained that Breather, for now, will focus on growing in its current 10 markets before expanding further as demand continues to surge.
“Companies are actively adding flexible workspaces to their portfolio,” said Murphy. “We’re just helping those companies understand that there is an alternative to coworking in the form of flexible private office that will really get them going.”