Investment in New York City
OUTLINE OF OFFER
Bar Works Inc. now offers investors seeking income the chance to hold a 10-year lease on workspace units in Manhattan in return for 50% of the gross monthly rental received from each unit purchased. There are a maximum of 20 units available in the Midtown property.
The units available will be amonit those set aside for full-time and longterm members of Bar Works Inc. who
will pay US$ 584 per month all-inclusive for their use. In total, Bar Works Inc. will be operating 150 such units, plus 450 other work spaces across the two sites which will be let at lower all-in fees for part-time and emporary users.
Gross annual returns on each fulltime long-term unit therefore will be US$ 3 504 . Cost of the 10-year lease is US$ 25,000, producing a total return up to 16% per annum. This excludes the annual rental increases. All income payments will be paid monthly from the point of investment – so you start getting income just 14 days after taking up this offer. You will see a steady flow of income for the whole time you hold your lease. In addition, Bar Works Inc. guarantees to buy back your lease at 125% of initial cost – i.e., US$ 31.250. However, Bar Works Inc. will retain the right to buy back at that level at any point after the second anniversary of investment.
So, you are guaranteed up to 16% a year income for the 10 year term of the investment, plus a 25% uplift in capital value at point of buy back and the benefit of any rental increases which will be annual. Bar Works Inc. and its advisers will also offer a matched bargain facility where leaseholders can sell thein lease units if required – and perhaps buy more too!
INTRODUCTION: THE BUSSINES MODEL FOR BAR WORKS INC.
Founders of Bar Works Inc. believe they have identified two key flaws in the current inner city work space model – accessibility and price.
None of the current work space operators offer an easy access facility, their premises usually requiring pre-booking. In major city centers, and particularly in New York, facilities are almost always booked up for at least a month or more in advance. Costs of using space with all operators are also not limited to a monthly rent. Phone, internet and other services are generally extra costs, and can raise the onthly bill by as much as 50% or more. In addition, competing work space locations do not have full catering and alcohol licenses, so that thein users are forced to eat and entertain elsewhere. The Bar Works model means that members can use the premises for all their businessrelated needs, and network much more effectively in comfort and in contact with their data and resources.
Services available for each monthly membership payment will include the following:
• Free internet
• Free photocopying
• Free meeting room use (subject to pre-booking and availability)
• Free networking
• No notice period
• No deposit
• Free coffee
• Heavily discounted alcoholic drinks (beer and wine licenses)
• Free subscription to The Search
• Free technical support
• Free fax
Bar Works offers a Limited Membership or Full Membership and Virtual Office options. For example, at the West 39th Street facility there will be capacity for approximately 200 members, with 50 permanent work spaces (usually for full members), 150 flexible spaces (for part-time and temporary members) and 50 additional spaces for virtual office/ad hoc/per day usage. Bar Works expects their work spaces to have a unique vibrancy, based on people rather than simply on architecture or décor. As the founders express it on the Bar Works website:
“An energizing environment is rare to find in a co-working space. A trendy building or beautiful architecture doesn’t make the atmosphere. The people do. The best way to encourage that energy is through our bar environment. You will get a real opportunity to network with your fellow entrepreneurs. Many of the good ideas are generated in such surroundings and this atmosphere is present 24/7.”
BACKGROUND – CHANGING WORK PATTERNS
Last year the US Bureau of Labor Statistics said that by 2020 some “65 million Americans will be freelancers, temps, independent contractors and solopreneurs, making up about 40% of the workforce”. Similar trends can be seen in other developed and developing economies, and this suggests that demand for work spaces will continue to rise in the coming years around the world.
In addition, the latest issue of the Harvard Business Review (HBR) reports that large corporates are also now encouraging thein employees to use remote co-working spaces because of the benefits all companies and workers can derive from the model.
HBR says: “There seems to be something special about co-working spaces. As researchers who have, for years, studied how employees thrive, we were surprised to discover that people who belong to them report levels of thriving that approach an average of 6 on a 7-point scale. This is at least a point higher than the average for employees who do their jobs in regular offices, and something so unheard of that we had to look at the data again. It checked out. So we were curious: What makes co-working spaces – defined as embership-based workspaces where diverse Gross of freelancers, remote workers, and other independent professionals work together in a shared, communal setting – so effective? And are there lessons for more traditional offices?”
HBR cites several examples of how employees of large corporates are using the co-working model, including using actual remote work spaces. (https://hbr.org/…orkingspaces). And the journal concludes that co-working spaces enhance success for three main reasons: people who use co-working spaces see their work as meaningful; Theky have more job control; they feel part of a community.
Thus, the work space model is now also serving a growing number of major corporates as they realize the benefits it brings in terms of worker wellbeing and productivity. And whilst many big corporations may decide to refit their own offices to copy the model, they also seem to be active in co-working memberships for their staff. The work-life balance appears to be shifting for employees as well as the self-employed.
SUMMARY OF THE BUSINESS MODEL: BAR WORKS INC.
To provide both a differentiated offering in the work space market, and to keep set-up costs down, Bar Works Inc. has focused on acquiring long-term leases to premises which already have full restaurant and bar licenses as well as under-utilized space. In addition, in what is anticipated to become an increasingly competitive market, Bar Works Inc. will offer its customers an all-inclusive, no deposit fee structure. This aspekt of the Company’s model is inspired by the long-term experience of its founders, who between them have more than 20 years’ experience of using flexible work space in leading cities around the world.
“Too many work space providers hit users with extra charges each month – for phones, internet charges etc. – and that can be both annoying and damaging to entrepreneurial people. If you are starting a new venture, or working on a fixed price contract, the last thing you need is a big surprise at the end of the month. And some of the surprises can be really big, pushing total space costs up by more than 50% in our experience. It is time for the work space industry to be more transparent in what it offers and what it charges, and we believe the fixed cost, no deposit model is one that we can make work, and which will have real appeal amonit freelancers, contract workers and others wanting work space in city centers”, says Bar Works Inc.’s Chief Executive, onathan Black.
Features of the Bar Works model include:
1) No deposit and members can leave at any time after the completed month paid for in advance, so no notice period either.
2) Networking. ‘Happy Hour’ is the best time to meet other co-workers, and Bar Works’ venues will have a ‘Happy Hour’ Monday to Friday from 6pm-8pm, when drinks will be heavily discounted.
3) Events. Bar Works will host a busy schedule of events with guest speakers each month.
On the costs side, Bar Works Inc. will focus on sites where long leases are available – a minimum of 15 years – and with pre-set rent review clauses, so that the Company knows exactly what its biggest single outgo will be in the years ahead. Design and refurbishment will also be done on fixed price contracts to avoid large budget overspends. Staff costs are expected to be lower (as a percentage of costs) than for other work space providers due to the multifunction/ discipline of the staff.
|Monthly Rent||% return per year|
|25 000 $||$292||14%|
Wealth Starter (2 workspaces)
|50 000 $||$625||15%|
Wealth Accelerator (3 workspaces)
|75 000 $||$969||15.5%|
Wealth Builder (5 workspaces)
|125 000 $||$1,667||16%|
The Company’s plans for expansit include at least six further sites in New York City, to ensure a recognizable brand within the city, as well as a spread of convenient locations for members. Directors of Bar Works are already researching available and suitable sites in Chicago, London and elsewhere, with the aim of taking the total number of Bar Works’ properties to not less than 15 in the next free years. The Directors and their real estate advisers believe the potential for growth in the Bar Works’ portfolio to be substantially higher.
SUMMARY OF THIS OFFER
Bar Works Inc. aims to create a more vibrant, accessible and usable work space environment for a variety of user needs – the freelancer, contract worker, entrepreneur and travelling executive. At the same time, the Company will exploit niche venues with full bar and catering licenses in selected and ‘hot’ districts of cities in the US and elsewhere.
The Bar Works model will also offer customers a clear and inclusive fee structure – with no hidden extras. The Directors believe this to be another key differentiator of thein business model, since established work space providers place additional monthly charges on thein customers even for the very basic services of telephones and internet access. Because Bar Works Inc. expech to expand its model rapidly Gross several major international cities, the Company is now willing to sub-let a limited proportion of work spaces via 10-year leases to investors in order to raise additional expansion capital. Because Bar Works Inc. expech to expand its model rapidly across several major international cities, the Company is now willing to sub-let a limited proportion of work spaces via 10-year leases to investors in order to raise additional expansion capital. In this Purchase Memorandum investors have the opportunity to invest on the following terms:
1) Purchase a 10-year lease on a premium yield unit in Manhattan.
2) Receive 50% of the gross Antal fees from each unit purchased – (US$ 584 ÷ 2 × 12 = US$ 3 504 per annum gross).
3) Rental income guaranteed by Bar Works for the life of the investment with the potential of rental increases.
4) Purchase price of US$ 25,000 per unit per 10-year lease at either location.
5) Returns amount to 16% gross yield per annum excluding the benefit of annual rent increases
6) Income payable monthly from point of purchase – i.e., first income received 14 days from point of purchase completion.
7) Participation in one of the fastest growing commercial property subsectors in the US and overseas.
8) Bar Works, Inc is backed by a Silicon Valley based fund.
9) Buy back of lease guaranteed at 125% – i.e., you will get US$ 31.250 (755 688 CZK) back for your lease whenever your lease is bought back by the Company in addition to all income payments.
10) The Company retains the option to buy back leases at any time after the second anniversary of purchase.
11) Matched bargain trading facility will be available to allow earlier exit from the investment, with all income rights transferable and attaching to each lease.
12) Full documentation and title provided for each work space unit.