Kinglet, an online marketplace for office space based out of Baltimore, Md., will be launching in D.C. and Northern Virginia on March 30, Kinglet CMO Jeff Jacobson told DC Inno. In addition, the Baltimore startup has been in recent discussions with native commercial real estate brokers to expand into the Philadelphia market followed by plans to launch in New Jersey and New York later this year. “Co-working [space] is not just a trend. We believe that collaborative work environments are here to stay,” the CMO said.
Founded in September, Kinglet curates a variety of different office spaces, focused on small to medium-sized businesses, and then aggregates information relevant to each space — including a specialized licensing agreement — making it accessible to growing businesses. The company’s supply comes from hosts who are businesses with unused space or traditional landlords with vacant space.
The idea behind Kinglet is to reduce the time and effort spent on a traditional office lease application, hopefully making what used to be a six- to nine-month process into a 48-hour one — aspiring to do what Zillow and RadPad have done for residential real estate.
Approximately 90 percent of office leases in the U.S. are for spaces less than or equal to 5,000 square feet, Jacobson said. Commercial real estate transactions have traditionally been driven by larger transactions and are more complex than residential contracts given their multiple asset classes, lease types, terms and negotiation points.
The fact is, individual spacing needs are shrinking and there is a real demand from consumers to force the market to adapt quickly. “Millennials graduate today with the dream of being their own CEO, not working for a big company for 30 years. In turn, business formation is off the charts,” Jacobson said.
Regarding Kinglet’s revenue model, Jeff said, “Listing space with Kinglet is free for Hosts. Monthly rates are marketed to Guests with a 10% premium. For example, if a Host lists a private office for $500 per month, the Guest will see $550 per month on Kinglet. We handle all payment processing and collect $550 from the Guest and pay the Host $500 each month. We only receive our fee when the Host gets paid.”
“In order to support our expansion, we are looking to expand our team of 5 and expect to raise another round of investment in 2015,” Jacobson told DC Inno. “Kinglet simplifies the process with a standard license agreement, non-negotiable pricing and ready to move into spaces. Companies can be in a new space in as little as 24 hours and expand and contract as needed. The traditional search and lease transaction averages over 6 months. Licenses can be canceled with 30 days notice.”
Last year, over 470,000 businesses were launched each month in the U.S. and one of the biggest risks they undertook was signing long term leases too early. The Kinglet CMO said, “Most small companies don't understand the complexities of commercial leases and the role of the commercial broker. In addition, most brokers do not take on the smaller requirements. A broker's time is valuable and they want to maximize it by taking on requirements that will pay them back for their time. Kinglet is not looking to replace the broker, we are working with businesses that are just not ready for representation yet.”
