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Downtown Digs Are Hot Spot for Virtual Office Locations

Providers of virtual and shared office spaces — such as Regus and Real Office Centers — have recently been boosting their presence in downtown San Diego by opening new high-rise locations.

Experts say the trend is spurred in part by sweeping changes in Web and mobile technologies that make it easier for certain types of businesses to get by without a full-time office presence. Also, improving fundamentals are giving early-stage tech-company operators and other entrepreneurs reason to move beyond their home-based offices to serve clients.

“It’s a mix of lawyers and CPAs like you would see in a lot of downtown locations, but at this location we’re also seeing a lot of technology entrepreneurs — people involved in Web development, gaming, and social media,” said Diane Kampner, marketing director for Real Office Centers, which recently opened a new 20,000-square-foot location at One America Plaza on West Broadway.

It is the second local center for the Newport Beach-based Real Office Centers, following a debut at University Town Center. Like those of several rivals, its shared services can be purchased on a per-month or per-session basis, including phone answering, mailing addresses, office workspaces and meeting rooms stocked with video-conferencing and other multimedia.

Share the Knowledge

There are “co-work” spaces, especially gaining favor in the tech community, where a variety of company workers mingle during the work day — attorneys and CPAs needing advice from tech experts, and vice versa — and where venture capitalists come to give talks and mentor small business owners.

Since opening about a month ago, Real Office Centers has booked up about a third of new downtown space to solo and small-business operators. Regus reports about half of its new space has been reserved in advance at DiamondView Tower in East Village, where it opened a 17,000-square-foot virtual office center around the same time.

This is the second downtown San Diego site for Regus, which also has a center at the Emerald Plaza office tower on West Broadway. While Regus has not taken a formal count, many of the users at its new East Village site are solo tech workers, attorneys, accountants and other financial professionals who live in the neighborhood and wish to maintain flexible work arrangements.

Clients Big and Small

“There are smaller companies looking for a more professional place to interface with customers, maybe something better than meeting in a coffee shop,” said Jim Doorn, Southern California market director for Regus. “But you also have a lot of bigger companies, including some Fortune 500 companies we serve at several locations in the U.S. that are looking to keep their office costs down when possible.”

Regus, with corporate headquarters in Luxembourg, has customers at its other U.S. virtual-office centers that include Google, Microsoft and Netflix, as well as various federal government agencies. In San Diego, users of Regus facilities include Bank of America, Fidelity, Penn Mutual Life Insurance and Metlife.

In San Diego County, Regus currently has nine locations, with a 10th expected to open by year’s end or early 2013 in the Scripps Ranch submarket off Interstate 15.

Doorn said the company has identified Southern California as a priority market for expansion, looking to build its current 35 locations to 100 within the next three to five years.

‘Mobile Home’

Regus now has 1,200 locations in 550 cities and 95 countries, and like its competitors has generally benefited from a rise in the use of “flexible” office spaces as working professionals have become more mobile. The Global Workspace Association, an industry trade group based in Irvine, reported that office business centers with packaged services saw worldwide revenue nearly double between 2007 and 2010.

Annual worldwide revenue last year passed $10 billion, including $3 billion in the U.S., and is projected to grow 5 percent to 7 percent annually over the next five years, according to the association.

Andy La Dow, senior managing director with brokerage firm Cassidy Turley San Diego, said the expanding presence of virtual office centers downtown coincides with a rise in the number of technology companies setting up offices in neighborhoods like East Village, where many young tech workers and company leaders have long resided.

For instance, he noted that TakeLessons, a Web-based company that puts budding musicians in contact with local singing and music teachers, recently moved from smaller offices to a new 20,000-square-foot headquarters space at DiamondView Tower.

“Most of the tech-related companies in downtown typically are in smaller spaces, around 10,000 square feet,” La Dow said, noting that the bulk of early-stage tech firms either can’t afford or don’t require large full-time office spaces.

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