Small Firms Struggle To Find Office Space
by Arlene Hirsch of Startup.wsj.com
Question: I'm looking for office space in the Boston and Silicon
Valley areas. I've heard the markets are competitive. How should I start
my search?
-- Danilo, Washington, D.C.
Danilo: I took your question to Dan Mihalovich, a principal in Mihalovich Partners, a San Francisco-based commerical real-estate firm specializing in tenant representation. He's also the founder of The Space Place web site, a site for tenants in the commercial real-estate community. Here's what he had to say.
Finding space isn't the most difficult task, but putting the entire transaction together and properly marketing the merits of the company in these markets is what it's all about. In a very tight marketplace, most tenants with requirements under 5,000 square feet will have difficulty getting the attention of a seasoned real-estate professional specializing in tenant representation. There are circumstances where a broker may have a great opportunity to establish an early and long-lasting relationship with a well capitalized, well-managed startup. Often the support team for the startup, including their venture-capital firm, law firm and project managers, will remember the hard work for little pay provided by an enterprising commercial real-estate broker.
Networking sometimes can be successful. The dynamics of blazing startups should intrigue most brokers, if one considers the venture-capital environment. VCs have little interest in companies that won't scale. Unless the business is going to boom quickly, the startup won't make it to funding. With an eye toward the future, as well as the high-and-almighty IPO, a broker needs to carefully screen its prospective small clients to see if a giant is in the wings.
If a business owner's space requirement is too small for a broker to get involved, they'll need to resort to self-sourcing market information. On the Web, smaller users may try www.Loopnet.com where most brokers in major markets post their space listings.
Smaller users may be best served, until their businesses grow, in executive suites offered by national providers. These suites are plug-and-play spaces, ready in day one for occupancy -- fully furnished, including high-speed internet access, phones, faxes, support services, conference centers as well as other amenities. Checking advertisemtents in the local newspaper is also worthwhile, since many landlords with smaller spaces don't access the brokerage community.
