The Disconnect Between Tech & Commercial Real Estate
There seems to be a huge disconnect between the slow moving industry that is Commercial Real Estate and the extremely fast paced world of Tech. I have been seeing a lot of Tech clients lately who come to me with a need for office space. Usually, they want to move within 1-2 months, but unfortunately, this “timeline” is not realistic. There are a couple reasons why this seems to be an ongoing issue:
- One of the major breakdowns is based on the fact that Commercial Real Estate can move as slow as molasses – it’s tangible/physical space that will most likely need some work – from carpet to paint to a full build out (walls, kitchen etc…). On the other hand, the Tech industry is fast. It is in the cloud and on an app or some sort of software that can be manipulated and changed in a few hours/days. When talking to some of these companies about their growth plans, they say they don’t know where they will be in as little as 6 months!
- There are so many more players involved in the process, which is reflected in the time it takes to get a deal done. From working with me, identifying the right space, negotiating a lease, bringing in an attorney for lease review, working with a space planner/architect on the space build-out, finding furniture, lining up the telecom provider, and scheduling the movers, you can start to see why and how things can take some time.
- The decision on where to locate your business and how it should flow once you occupy, is a BIG and VERY IMPORTANT decision. Next to your employees, your office rent is one of the biggest expenses your business has; therefore, it’s imperative to get it right. Recognizing your company’s culture and how that should be reflected in the physical space ultimately effects how productive your people are, how effective you are at attracting and retaining the best talent and expressing who you are to your clients.
So…what to do?
I usually tell people that they should plan for the whole process – from beginning to think about your culture and how that should be reflected in your office space, to actually moving in— taking anywhere between 4-12 months. Larger companies being on the longer end of that spectrum. You want to make sure you don’t get rushed into a space that is potentially too big and for a term that is too long. It is of utmost importance to have flexibility in both size and term.
Get all of the players on board in the beginning. Having your architect come in early on in the process will really help in deciding which spaces to put on your short list. It will also make the planning and build-out process move along much more smoothly. With regards to the attorneys, furniture, telecom and movers, you should start having all of those conversations, and giving everyone a heads up that you are going to be making a move sooner than later.
And finally…communication is KEY! Make sure that you have the internal group who will be working on the office project identified in the beginning. Open communication with this group, and a clear understanding of everyone’s roles will help the process move along well.