Convene was launched by real estate financier Ryan Simonetti at the height of the global financial crisis in a bid to help companies in New York save on their real estate costs by providing “on demand” meeting spaces. A decade later, with 30 flex meeting and workspaces in operation in the US, the business began to look towards global expansion. Then, just as it was gearing up to launch its first two new spaces to a London audience another global crisis struck.
The coronavirus pandemic could have brought Convene’s plans to expand in the UK to a halt as workers across the nation were forced into lockdown, replacing physical meetings with endless Zoom and Teams calls.
Tools were downed on both its London sites as the government dictated that we all had to get home and stay indoors to save lives.
Convene secured its first two international sites last year, agreeing to take 102,000 sq ft at Axa’s 22 Bishopsgate, EC2, and 70,000 sq ft at 80 Fenchurch Street, EC3. Both had been scheduled to open this year but will now not come online until Q3 2021.
But for Elliott Sparsis (pictured right) and Sebastian Abigail, the two men tasked with leading Convene’s global expansion, the pause has been positive for the business.
Sparsis, who joined the company in 2018 after seven years in Blackstone’s central London real estate team, says Convene is still “100%” committed to London and is “very comfortable” with its slated late 2021 opening schedule, a time when the world is expected to be returned to something akin to normal.
But that comfort is mainly born out of learning and adapting to a potential new normal.
“We’ve learned a lot in the last few months and Convene is now a better, stronger business than it was at the end of February,” says Sparsis. “And what I mean by that is now our business is driven even more by technology and our physical footprint and our physical design is now empowered and powered even more by technology in terms of our core infrastructure than it ever was before.
“I think we’re going to come out of this a stronger business,” he says. “Our physical product is definitely going to be superior to what it was when we were actually moving into this.”
That physical product is, in Abigail and Sparsis’s words, a premium-end flex space offer that provides hospitality services to corporates and a solution to landlords wanting to be fully adaptive to both the changed and changing needs of occupiers today.
“Ultimately we’re a solutions business,” says former Knight Frank London leasing agent and VTS director Abigail. “Our goal is to help landlords and occupiers with any work-related challenge they have. Covid has thrown up a ton of new challenges around employee engagement in terms of collaboration and coming together as teams, working remotely and the challenges that organisations experience now that they have decentralised their workforces. We’re absolutely at the epicentre of helping occupiers and landlords think that through.”
The vital elements
The future of the office is a much-debated topic. Prime minister Boris Johnson is desperate to push us all back to our workplaces in an attempt to kickstart the economy, but with the virus far from eradicated many are still staying away. Most agree that, while the office is not dead, it is much changed and that both the type of space needed and the terms on which space is needed is going to have to be flexible.
“The bottom line is Covid has accelerated the demand for flexible space and that is driven off how precious capital is for corporate businesses,” says Sparsis. “They want to preserve as much capital as they possibly can. So if they can move in and buy their real estate off the shelf from a flexible provider then that mitigates the need for them to have to invest massive sums of capital in rent deposits, fit-out, design, etc.”
The flex model has been proven in recent times and the reams of headlines on how corporates plan to operate in a post-Covid world provide solid evidence that flexibility is only going to become more of a commodity.
But as great a concept as flex space is, it is still often seen as lacking in transparency and of stealing control of the occupier market from landlords.
Convene, says Sparsis, hopes to be the tonic to those concerns by delivering a partnership model to landlords that gives them the flexibility to deliver a “traditional” long-term lease to a tenant, the option for that tenant to flex into space elsewhere in the building, and to benefit from a suite of hospitality services provided through the Convene model.
The bottom line is Covid has accelerated the demand for flexible space and that is driven off how precious capital is for corporate businesses
– Elliott Sparsis
He adds that the model emerged from a need for landlords to take back control and the value they have been gifting the flex operators. Landlords have now realised, says Sparsis, that by letting huge chunks of space to flex operators they have created a barrier with the true end user of the building and handed all the value in the flex offer to the operator.
Convene wants to rebalance that by providing a management service agreement that gives the landlord the ability to offer a right of first refusal for tenants on flexible work suites in their own building (or ultimately across their portfolios).
“This is true flexibility rather than it just being a gimmick,” adds Abigail. “From an infrastructure perspective, from a headcount perspective and from an operations perspective, it’s far more efficient.”
Sparsis questions why tenants or landlords would spend huge amounts of capital on individual corporate commercial kitchens or events space that get used sporadically when it can provide vertical catering in an asset and on demand auditorium or meeting space.
“If you think about what the office is likely to be going forward, it needs to be a meetings experience, it needs to have hospitality. You need to encourage people to come in to collaborate. And that really is the operations of a hotel,” says Abigail. “Landlords and occupiers don’t have all that experience. If you look at the hotel industry, hotel developers bring in an expert operator to run those services. That’s really where we see the future of office and our role to play in it.”
The power of partnership
So, no death-of-the-office predictions from Abigail and Sparsis. Unsurprisingly, both see huge opportunities in the market for expansion. Although, as a premium operation says Sparsis, don’t expect to see a Convene on every street corner.
He says the business thinks the City of London can probably accommodate a further two of Convene’s operations, while London’s West End could take four.
The business has been rumoured to been looking quite closely at 78 St James’s Street, SW1, the former HQ of HSBC Private Bank which is undergoing a 110,000 sq ft redevelopment by BentallGreenOak on behalf of the state oil fund of Azerbaijan.
And it is eyeing the opportunities that could be thrown its way as a result of the repurposing of retail. Department stores offer the perfect space for a Convene, says Sparsis, highlighting Unibail-Rodamco-Westfield’s plans to transform a House of Fraser at Westfield London into flex space.
“We’re seeing a lot of big retail and department stores now being converted into large destination meetings and events space,” says Sparsis. “That physical real estate absolutely lends itself to a Convene operation. Big floor-to-ceiling heights, generous arrival experience, transport in and out of the location.”
He believes more of that space will be coming back to market and that landlords will struggle to know what to do with it. Convene, on the other hand, won’t, he says. In the US, Convene recently converted 73,000 sq ft of the former Saks Fifth Avenue department store at Brookfield Place in New York into an events and meeting space. Could we see Convene do the same with redundant House of Frasers, Debenhams or even John Lewises here?
“There is a specific group of people who utilise and use our space that retailers want to try and encourage to spend time within their retail department stores,” teases Sparsis. “So there is a synergy between their client base and our client base.”
And it is Convene’s client base that is the fuel behind its expansion plans. The business transacts with around 4,000 different businesses through its meetings and events products, the vast majority of which are global corporates. Over the past few years it is those clients that have been asking Convene to provide the service it offers its US offices to its UK outposts.
“Fundamentally, our expansion started from the demand coming from our US clients, the Goldman Sachs, the Deutsche Banks, those big corporates that want to have complete trust in large meetings and event space,” says Sparsis.
Abigail adds: “We might integrate into some of their booking systems and their back end so that an executive assistant or an event planner can immediately book space with us without having to go through the lengthy process of terms and conditions and so on. So we’re really being a true outsourced partner rather than just a provider space.”
Partner is an often used word by Abigail and Sparsis during their interview. They both place great importance on it and power in it.
Perhaps it is because the pair come as a real partnership themselves having run their university ski club together and then set up industry network Sociable Surveyors. Perhaps it is because they see the benefit of knowing how each other operate and understanding each other’s strengths and weaknesses.
“Elliott and I have known each other for over 10 years and the opportunity to go and work with a best friend is a once-in-a-lifetime opportunity that you don’t turn down,” says Abigail sincerely. “Most people that work together don’t have the luxury of knowing those boundaries or understanding how to get the best out of each other, so I personally feel incredibly privileged to work with Elliott and I know he does as well.”
After a moment of silence that could have been the internet dropping out in a Teams call interview, Sparsis responds as only a real friend could.
“No comment.”
To send feedback, e-mail samantha.mcclary@egi.co.uk or tweet @samanthamcclary or @estatesgazette
