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Strong demand could bring more exec office suites

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They were ambitious, so they started their own company. They also were practical – a bunch of civil engineers — and wanted to get up and running without laying out big money for office space and equipment. So the partners in Engineering Alliance Inc. moved into an executive office suite at the Foxboro Business Center in Johnston.

In less than a year, they were gone, off to larger quarters and more independence. But that’s fine with the Foxboro people; a steady flow of tenants has kept their suites full and created a modest waiting list.

That’s not the only executive suites facility that’s doing well. At the Court Avenue Business Suites above Court Avenue Restaurant and Brewing Co., floors two, three and four are nearly full and owner Lloyd Linn is likely to start offering space on the fifth and topmost floor within a year or so.

And at Ingersoll Business Suites at 1922 Ingersoll Ave., owner Chuck Haas is adding five exec suites this month, and listening to pitches from people who think he should start offering the same service in West Des Moines.

The demand for exec suites indicates that plenty of Central Iowans are interested in starting their own businesses — or giving an existing business a more professional image — without venturing too far into debt.

The basic concept is this: A fledgling business owner can rent a small business suite – a single room, actually – and also have access to amenities such as a receptionist, a high-speed Internet connection, postal service and a conference room. At the end of the month, the renter pays one bill to cover it all.

Randy Walters built the Foxboro Business Center seven years ago at 6165 N.W. 86th St. in Johnston, then an undeveloped area. “It was ahead of its time,” said Lori Bosley, who manages the facility. “Three years ago, only 45 percent of the suites were occupied, but it’s been full for almost two years, and now we have a waiting list.”

“If we weren’t in a fast-growth mode, we probably would still be there,” said Doug Ernst, a principal and project manager for Engineering Alliance. “We just ran across it as an alternative as we searched for office space, and it allowed us to grow on an as-needed basis.”

According to the Office Business Center Association International, more than 4,000 such facilities exist in North America, with monthly charges ranging from $500 to $2,500.

The least-expensive arrangement at Foxboro costs $600 per month for an office of 150 square feet. The next-biggest space, 196 square feet, costs $800 when the renter opts for only basic services. For an extra $100 per month, the building receptionist will answer the tenant’s phone.

The 22,000-square-foot building has about 45 in-house renters. Another 30 or so “virtual office” clients have signed up for services, but no space – a game played by both entrepreneurs and well-established national firms.

“A company from New York needed a presence in Des Moines, so we answer their phone and transfer calls to New York,” Bosley said. “Same thing with a guy in Seattle.”

Foxboro is all set for growth in that field. “We have 400 phone lines reserved for our use,” Bosley said.

At Court Avenue Business Suites, “a lot of start-ups are virtual office users,” said facility manager Dave Nesbit. “We have about 40.”

For $100 per month, a virtual user gets a Court Avenue mailing address, a phone number, a fax number and a voice-mail account. Most sign up for the $200 plan, which adds phone-answering and use of a conference room for meetings with clients.

The suites opened in 2002, and business people who have rented space in the 125-year-old building have tended to stick around. “We thought we would have a lot of turnover,” Nesbit said. “But many of the tenants who came in 2002 are still here.”

A fair number of the building’s tenants are attorneys, including several who moved in right out of law school.

The emphasis is on medicine, not law, at 1922 Ingersoll, where the renters of Ingersoll Business Suites’ 22 offices include several psychologists. But manager Jennifer Espeland said the explanation is simple: “The No. 1 reason people choose executive suites,” she said, “is proximity to where they live.”

Espeland was involved with the Foxboro center when it started, and said the exec suite market took a nosedive when the dot-com bubble burst. “High-tech companies were 80 percent of our business,” she said. “But now it’s coming back. If the demand continues as it is, there’s a high likelihood we would expand.”