Quest Workspaces Founder Laura Kozelouzek Traces Coworking’s Evolution

Now, Kozelouzek is running the other one: a boutique coworking firm called Quest Workspaces that she launched in 2010. Now, the firm has 12 locations in South Florida and one in New York’s Financial District. The newest location, in West Palm Beach, is scheduled for a grand opening in June.

Commercial Observer spoke with Kozelouzek about the state of post-pandemic coworking, with the institutional knowledge of close to three decades in the business.

The following has been edited for brevity and clarity.

Commercial Observer: You’ve been in the business of flexible office leasing since the ‘90s. How has the industry evolved since then?

Laura Kozelouzek: So, I’ve been doing this for so long, I’ve seen the evolution in terms of where it started and where it is today. In the 90s, it was mostly about access to equipment like fax machines and copy machines since smaller companies couldn’t buy those on their own. In the 2000s era, it was really more about providing smaller spaces for companies because direct leases were really just full floors. Small businesses, regional businesses, or even enterprise clients that needed small spaces couldn’t rent that directly from landlords. So it became more about flexibility, smaller spaces and shorter terms. 

By the time WeWork came into the picture, and the term co-working became popular, people could work from anywhere from their laptops. So then the office space started getting more interesting. They were more like the hospitality industry, where you had different looks and feels and branding from different operators. Years ago, I used to work for Regus — actually, I started in the industry before Regus even existed, which is kind of crazy — but office space was really boring. It was just white box, very sterile. And then it started to take on more personality. 

Now, in the post-COVID work-from-home movement, it’s still evolving and changing so rapidly. The drivers are even different today than they were even five, 10 years ago. Now it’s really about getting employees back into office spaces and being productive. So the look and feel and the services and the community are even more relevant and important today than they were pre-COVID. It’s pretty interesting to see what’s happening because I’ve been doing this for so long.

Is Quest more of a coworking space, where people hot desk, or is it more about private flexible leases? 

The terminology gets muddled a lot, in terms of how people define it. For the most part, people think coworking is like you said: a hot desk, open plan design, with a long desk and people jamming away. We do have shared community spaces where people can touch down, collab. We’ve got collaboration spaces, we’ve got huddle spaces, but, for the most part, we rent private offices; it’s not really a membership model. Most of our audience is professional services firms  like law firms, financial firms, so they need to have private space. It’s just more conducive for their type of business than, like, a tech company, let’s say.

Pre-COVID, or let’s say five years ago, your competition would have been mostly other shared workspace companies. But, now, every office landlord is either trying to do it themselves, or farming it out to a third party — so the notion of flexible leasing and smaller spaces is basically everywhere at this point.

I think it’s a good thing. Flexibility is going to be more and more important in terms of the way people work. You know, there had to be a tipping point where lenders and underwriters of office buildings had to start accepting the fact that there needed to be built-in flexibility into offices — more like hospitality and hotels. And that’s what’s really shifting right now. It’s being propelled by the fact that companies are demanding it. Owners and asset owners have accepted the fact that in order for them to be relevant in terms of a real estate class, they need to provide flexibility.

I’m envisioning an office building where it’s like a stacking plan, where you’ve got conference facilities, meeting facilities, coffee shops, touchdown space, then you have the shared workspaces, or coworking spaces, and you have ready suites, which are a little bit larger, less service, and maybe those are offered on a one- to three-year term. And then you have the direct leases. I think there’s gonna be a mix of products in office buildings. There has to be. It can’t just be the full-floor tenant that’s gonna sign a 15-year lease. It’s just not practical anymore.

Does that upend your business at all? Since there won’t be a need for standalone coworking?

No, I think it’s a good thing. It’s like a hotel, right? Usually the group that develops the hotel is not the group that actually runs the hotel. They hire Marriott or Hilton, or one of the hotel brands to actually run the hospitality piece of it. I think most asset owners are going to look towards hospitality, operating companies such as Quest to either run that for them through a management contract, a JV, or in a straight-up lease.

Quest has 13 locations and you’ve been around for a while — clearly scale is not  what you’re going for. So what makes a Quest quest location?

Since WeWork got started so much of the industry has been about raising massive amounts of capital, deploying it quickly, and creating massive brands. Quest, on the other hand, is very different; we’re not looking to go public. We have no investors, I have no partners, I have no debt, which is, like, unheard of, in this industry. I started the company with $50,000, and then just grew organically. 

I’ve worked for Regus, I’ve run 500 locations for them. I’ve been part of roll-ups in the industry, I’ve scaled quickly. But, for me, what I really, really enjoy is creating that real and amazing experience, so it was a choice to create a high-touch boutique service company. But there’s no right way, right? It depends on the founder and what they’re trying to achieve. In this industry, you don’t have to have 700 locations in order to create a great experience, and to really be a leader in the industry. 

Before Quest, you had a company called Synergy Workspaces that was acquired by Carr Properties. How did that come about?

Yes. Oliver Carr — he’s like 90-something years old at this point — he was involved in the industry back when it was being consolidated. Holy cow, I would say in the late `90s. I think he always had a passion and a love for it. They were a big owner of a group called Omni that merged with another group that merged with HQ that is ultimately Regus today. 

They continued with their REIT and then Oliver Carr was behind starting Carr Workspaces [in 2003], so they’ve been in business about 20 years now. When they acquired my previous company we had more of a national footprint, and that helped them grow nationally.

Actually, going back, in terms of landlords and owners, I would say Carr is probably the only one that comes to mind where it wasn’t about jumping on the WeWork bandwagon. They’ve been committed to it for decades. 

I’ve worked with so many landlords over the years where, at various points in time, they say, “Gosh, this is an interesting business.” Even CBRE with Hanna, and Silverstein with Silverstein Suites. It’s not that they can’t do it. They’re smart. Don’t get me wrong. They’re brilliant owners, but it’s just a different business. It’s not transactional, it’s really operational. I don’t think that they’re set up to do that.

When I first started Quest about 10 years ago, which was when Silverstein started Suites, I met with them and they said, “Listen, we’re going to grow this, we want to grow this, we want to hire you, we’re going to be bigger than Regus.” And, fast forward, they have one location. Is it because they couldn’t do it? No. They just realized it was easier for them and more profitable to own real estate and actually try to operate the center. 

So when you say, are all these owners gonna do it themselves? I don’t think so. Imagine, they’re not even used to dealing with small 2,000-square-foot tenants. In our space, in let’s say 20,000 square feet, we’ll have 200 companies working between virtual offices, meeting rooms, etc. And that to them is not appealing. 

I noticed from your website that you have a fairly diverse staff, from what I can see at least. Is that something you consciously attempted to do?

Absolutely. We joke in our company that we can’t be more diverse, not in the sense of just what you may see on the website, like in terms of gender, ethnicity and age and everything. It’s also that — my chief operating officer and I’ve been doing this for 30-something years together, working for different companies — and we couldn’t be more different in terms of likes, dislikes. She loves barbecue, I eat more healthy; it’s kind of on every level. 

We come from so many different backgrounds but at the same token, like, there’s this common thread that runs through the company in terms of — and it may sound corny — how we view people, how we view service, how we treat one another how we share this culture of working really, really hard yet we love to have a lot of fun, we don’t take ourselves too seriously. It’s more of the intangible stuff, which is hard to hire for. 

This isn’t something that I learned overnight. It’s taken me about 35 years to figure that out, and how to replicate it. It’s a tricky thing to do. 

Chava Gourarie can be reached at cgourarie@commercialobserver.com.