Seeking Bay Area Office Space? Here’s What Startups Need to Know
Seeking Bay Area Office Space?
Here’s What Startups Need to Know
Why a project management firm is essential in your search
Home to tech titans like Google, Apple, and Facebook, California currently ranks as the number one state millennials are moving to. The San Francisco Bay Area is an especially key destination for these educated, mostly mobile workers. Not only Gen Y seek great food and countless outdoor activities the Bay Area offers but also proximity to success stories in the tech world, like Slack’s recent IPO and hotly anticipated public debuts from the likes of Postmates and Airbnb.
When it comes to office space, though, demand outpaces supply right now. Startups moving to the Bay Area will have to navigate a rather crunched market — but it’s by no means impossible.
We spoke with Robert Tasker, CEO and Principal at CM Commercial Real Estate in San Francisco, who offered some advice for this competitive and saturated tenant leasing market. For entrepreneurs/startups and tenants seeking to relocate to or within the Bay Area, here are some key questions to consider during your search.
1. What does a typical Bay Area office need?
Thanks to pioneering tech companies like Apple, Google, and Salesforce changing expectations, offices today need to be more than just a place where employees sit at desks. Companies moving to the Bay Area or relocating their offices need to evolve and redefine their office for various workstyles and shared open spaces to encourage cross-functional collaboration and creativity.
Even traditional industries, such as law and the financial sectors, are recognizing that today’s offices need to not just foster individual productivity but also serve as spaces to hold meetings and events, and be able to expand down the road as the company attracts more talent. In short, companies today need to be looking for space that is adaptable to the rapidly changing needs of the business world.
2. How can a project management firm improve my search?
Once potential office spaces are shortlisted with your broker, engaging a project manager to help evaluate the properties from a constructability standpoint is to your advantage. Enlisting a PM firm can streamline the process in budgeting your space for buildouts or designing effective open office layouts. An experienced PM firm can help assemble a tenant’s budget, keep it under control and review vendor proposals and suggest cost effective strategies.
Together with your broker, a project manager will tailor your office search around your specific needs as a company: how much square footage you’ll need to accommodate future growth, the ratio of public to private spaces in the office, number of conference rooms, and the level of amenities you should be offering, including onsite food options, wellness rooms, bike storage, and micro-kitchens. These are all part of work-life integration millennials now expect. Unlike an architect or interior designer, who has one specific focus, PM teams are experts in factoring all details into an office search while still keeping your move within budget.
The right space is crucial for attracting and retaining new talent and staying ahead of the competition. Partnering with the right commercial real estate broker and enlisting an experienced project management firm can simplify the tenant leasing process.
3. Where can a new company find affordable Bay Area options?
Sure, the San Francisco Bay Area can be a challenging leasing market to penetrate, but working with an experienced broker alongside a project management firm can uncover quite a few more options than might first be obvious.
For example, CM Commercial analyzes market data on local brokers, landlords, and resources to help clients find office space. Startups who need to move into a space quickly but not lock themselves into a long-term lease might consider an interim solution like a sublease, coworking space or direct space that is ready to go without major tenant improvement work. CM Commercial helps companies find these options quickly because they closely track the market and advise tenants to evaluate all possible options for their business.
4. Coworking or traditional office space?
Flex working is a top demand among Millennials and Gen X employees, and often companies turn to coworking spaces as affordable ways to provide it. Right now, the flexible workspace market is expected to represent 30 percent of all offices by 2030, and San Francisco has the most coworking spaces per capita in the United States.
According to Robert Tasker, coworking isn’t the only way to provide flexible work and typically is not the least expensive option. Coworking companies build the price of improvements to the space into tenants’ rent. In an overpriced market such as the SF Bay Area, this can actually end up costing the company more than they would incur with a traditional office lease. Again, it depends on the company, its headcount, and plans for the future, but it’s important to understand the economics behind coworking spaces before you settle into any long-term arrangement with one.
Make no mistake, the SF Bay Area office market is a complex, intricate market to navigate when you’re a startup or seeking to move. Partnering with the right team during the leasing process can uncover a whole new world of options you might not have even realized existed.
Begin your search for your company’s new office space in the City by the Bay today.
Thank you to Robert Tasker of CM Commercial Real Estate for his valuable input on this piece.
