Breather launches membership program for on-demand offices

Monthly passes start at $1,500 a month

Breather’s Bryan Murphy (Linkedin)
Breather’s Bryan Murphy (Linkedin)

Breather, a startup that rents office space and meeting rooms by the day, is looking for more long-term relationships.

Through a new membership program called “Passport,” users can purchase five, 10 or 20 monthly passes to any of its 400 spaces in 10 cities. Prices range from $1,500 to $5,800 per month and the membership can be canceled at any time.

The Montreal-based startup said existing customers asked for a membership program of some sort as businesses work out plans to return to the office, either full- or part-time.

“A lot of companies are letting their leases lapse as they come up for renewal, but they’re finding they still need a place to meet from time to time,” said CEO Bryan Murphy. It can be expensive to book one-off spaces, he acknowledged.

It’s also a way to lock in consistent business for the company, which has struggled financially over the past year. “It’s a way for us to increase usage,” Murphy said. “For the customer, it’s more cost-effective.”

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Breather laid off nearly a fifth of its staff last December. At the time, Murphy acknowledged Breather’s overspending, according to a video recording of a company meeting seen by Canadian news site BetaKit.

In the video, Murphy said the startup spent $120 million of its $122 million publicly disclosed funding.

This week, Murphy told The Real Deal that Breather raised an undisclosed round in late 2019, giving it a “solid balance sheet” heading into the pandemic. The company instituted temporary pay reductions and furloughs, and received a loan through the Small Business Administration’s Payroll Protection Program to avoid layoffs. Murphy said that as business rebounds, furloughed employees have been brought back to work.

Although New York’s office market has been dismal, some flex-office companies say they are experiencing demand from people who need occasional workspace.

Murphy said Breather has an advantage over firms with open-floor plans since all of its spaces are private. The company currently has 400 spaces in Montreal, Toronto, New York, Boston, Los Angeles, San Francisco, Washington, D.C., Chicago and London.

Although occupancy at Breather’s spaces plunged in March and April, Murphy said 75 percent of its spaces are being used. It did not permanently close any locations, but is working with landlords to pivot from a lease model to operating agreements. So far, it operates 15 percent of its locations through landlord partnerships. “I do expect it to be a significant path forward for us,” he said.

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