After reading a recent article on the dark side of co-working, we thought we would chime in. It comes as no surprise that co-working is starting to see some backlash among small businesses and contractors. As a relatively new solution to traditional office space in the U.S., co-working has taken off like a wildfire. If you are on either the west coast or east coast and involved in commercial real estate or you are looking for real estate – you certainly have seen all the cool, open, innovative co-working solutions. It is starting to pick up everywhere else, but it seems the coasts have taken the lead.
When visiting with small business owners about how their company’s office space plays a role in the business growth and culture, there’s typically a common theme that rears it’s ugly head: too many mistakes are made in the leasing process. Owners and decision makers often make several key mistakes that can end up costing companies significantly down the line and can even cripple their growth rate. Because office rent is the second highest expense the vast majority of companies incur, doing things the wrong way leading up to signing on the dotted line can be devastating and can make any business owner go crazy!
There have been a few stories that have come out recently saying that Starbucks will begin selling beer and wine at locations in several major US markets by the end of 2012. Starbucks began testing the concept in some of it's Seattle home based locations back in late 2011, and is planning on implementing the sale of beer and wine in cities like Atlanta, Chicago, and a few cities in Southern California soon. Word has it that they will start testing the concept in 4-6 locations in each of those markets and go from there. Seems as if Starbucks is attempting to become more of a true cafe, serving coffee, tea, beer, wine, to go along with pastries and Panini's. There are no immediate plans to expand the concept into any of the major Texas cities, but that could certainly change after seeing a positive response in some of the test markets.
Noble Energy just signed a 497,000 square foot lease in the former Hewlett Packard building in northwest Houston. That is almost 11.5 acres and they will occupy all 10 floors with plans to expand in the future.
The always awesome Mark Suster posted on New Years his new year's resolution to spend more time on "the right side of the Haimish line" which is a term that was coined by David Brooks here. I highly recommend reading both Suster and Brooks in their entirety as this notion of the hamish line it is a great way to have a more fulfilling year. I agree whole heartedly in getting out in the mix. It's why I try to strike up conversations with those around me where ever I am. There is always something new and interesting to learn from others.
For our first 2012 installment of office space of the week, we are featuring our friends over at Infinity Power Partners, an energy-consulting firm for large consumers of electricity or natural gas. Located in Three Post Oak Central in the Galleria area, Infinity's execs have matched a Galleria corporate & budding energy business culture with their love of big game hunting and flat screen TV's. When it comes to office space in Houston in the Galleria area, Infinity Power Partners has just about the best location possible with it's close proximity to 610 and all the Galleria retail that's within walking distance. Oh, and the views aren't too shabby either....
After reading this article on leasing trends in commercial real estate, we began to think about what the metrics meant for tenants. Loopnet put together a very good info-graphic (below) on lease versus buy trends and I thought a few statistics were interesting from a prospective tenants viewpoint as they lease new or renew space for their business -
It's always interesting to compare commercial real estate leasing trends from market to market. Different cities and regions produce unique leasing landscapes and a tenant leasing office space in Houston Texas may value certain amenities differently than a tenant leasing space somewhere on the East Coast. According to a recent article in Globe Street, CBRE sent an anonymous survey to decision makers of more than 100 large tenants across the state of New Jersey ranking the most important "must-have" amenities in an office building.
We hear it all the time. Prospective tenants are sometimes wary about using a tenant broker because they think A) there is a fee involved, B) the broker may not be a market expert and know the best options available, and C) landlords charge higher rent for tenant who use a tenant broker to sign a lease. TheSquareFoot has certainly addressed A and B ad nauseam, and we need to flush out C just so everyone is clear on how the system works.
One of our Houston retail brokers, Lance Gillam of UCR moodyrambin PAGE, was quoted in GlobeSt yesterday talking about current trends in Houston retail space leasing. It is interesting to see the dichotomy between class A retail space--where there can often be a waiting list--and class B and C space where vacancies abound.
Recently we took a break from our efforts of bringing efficiency and transparency to Houston small businesses and entrepreneurs who were looking for space for their business. We ate at Sushi Pop located across from Memorial City Mall on I-10 and Bunker Hill because we had heard good things, and knew it was owned by the same group as Azuma and Uptown sushi. The sushi was delicious but we were surprised by the fantastic build-out and retail space. The inside was meticulously decorated and felt open and inviting. It is usually difficult to find a reasonably priced sushi retail establishments in Houston, which has awesome food and also great restaurant space, but Sushi Pop has our seal of approval!
This week TheSquareFoot is featuring the office of Green Business Bureau, which aims to aid companies and organizations to become environmentally friendly or "Go Green". Green Business Bureau believes that not only can green business practices and processes help protect the environment, they may also help a company improve its bottom line. We thought this was an awesome concept and wanted to check out the hub of this exciting Houston-based venture first hand. Located on the second story of the building housing Brian O'Neill's Pub, this unique setup for a Rice Village office in Houston looked ideal for a company full of so many young faces.
It doesn't seem that long ago when I attended Startup Weekend Houston in February, and really caught a glimpse of what the startup scene was like here. TheSquareFoot was a brand new idea then, and I was excited to attend an event like this for the first time. I remember being nervous walking in because A) this would be the first event I attended of its kind, B) I didn't know ANYONE, C) I knew I would be pitching for the first time in front of a large audience, and D) I had no idea what kind of feedback I would get on our concept. Most people outside of the industry don't know much about commercial real estate leasing, and it's almost impossible to make it seem like a glamorous business.
Reading through Zag.com and TrueCar’s models, it struck us that car buying and commercial leasing is not all that different. We've already been explaining to people how the search for a commercial lease was changing in the same fashion that the car buying experience did about five to eight years ago. Back then, the average automobile consumer would drive to multiple dealerships, talk to salesmen, talk to their friends, and maybe buy a Kelly Blue Book or Edmunds magazine.The consumer was trying to get educated prior to making a major purchase. Today, the same consumer gets online, learns the process, the sales tricks, the best time to buy, and scans the available options. They arrive at the dealership with a graduate-level education compared to the old way of buying a car. The similarities don’t stop there. When you buy a car, the dealer has an end price in mind and tries to confuse the bottom line by lowering the sticker price, tweaking the down payment, adjusting the interest rate, or a multitude of other variables.
We love connecting with old friends who have been involved in the startup world and chatting about their experiences with office space, and how it factored into the growth of their companies. TheSquareFoot caught up with Shion Deysarkar, CEO at Datafiniti. Datafiniti is a search engine for data.
Last week I attended a networking event at NYU poly labs hosted by CBS alumni who office there. I had a chance to catch up with our buddy Ben Zhuk of BestVendor. Trying to fish for some business, I asked him what happens when people outgrow their space there. He said most try to take over a lease of a startup who is in a space that has grown too small for them as they themselves need to expand. I told him those are great if you can find them, but they aren’t abundant in most markets.
Written by: Linda Day Harrison of theBrokerList.com, a way to unite commercial real estate organizations and affiliated members so brokers may message and find each other or groups of their colleagues for future reference.
TheSquareFoot got the chance to chat with Nick Ducoff, CEO & Co-Founder of Infochimps and an old friend, about how office space factored into the growth of his company from an Austin startup based in an apartment to commercial space on West 6th Street. Infochimps is a data platform for apps and analytics.
Recently, we went on an adventure to the Blinds.com offices on Richmond off the Beltway in Houston. I am not sure what we expected, but we were blown away by the energy and creativity glowing throughout their office space.
Chuck Gordon, founder and CEO of SpareFoot joined us to talk about their Austin office space and his experience with different office spaces through the growth of his company. SpareFoot is the world’s largest, simplest and best marketplace for self-storage. They also provide leading web marketing solutions for storage operators. SpareFoot currently offices at 701 Brazos Street, Suite 700 Austin, TX 78701.
From GlobeSt, Kuwait Finance House in a partnership with Grosvenor is set to invest more than half a billion dollars in private-pay senior living facilities and medical office buildings. Although the fund will target mostly the coasts, we can assume that due to their interest in medical office buildings, Houston will surely get a look or two as it is home to one of the largest stocks of medical office space to lease in the world.
This week we are featuring Forthea, an internet marketing company that helps businesses and brands thrive online. Their office in Greenway is located on Alabama and embodies the creativity and spirit their firm creates for their clients. We love their name and one of the meanings of the Greek word "thea" is 'sight', so it quite literally means 'for-sight'. Not to be simple, you can see the additional meanings here.
Wow, we all know that commercial real estate can often times be slow to adopt to new trends in technology. So much of the industry is driven by personal relationships, referrals, and physical networking that commercial real estate providers and specialists aren't always as open minded about changes in technology as professionals in other industries are. Don't get us started down that road today, but what about on the consumer side of the business?
On Monday in my Real Estate Transactions class we had the pleasure of having Lloyd Goldman, CEO of BLDG and EVP Scott Zecher come to discuss their distressed purchase of 1372 Broadway in the Garment District in 2008. As the case states, they are “one of New York City’s savviest and most seasoned real estate investors” so it was very interesting to hear them discuss the ins and outs of that deal as well as hear their general thoughts on the industry. BLDG is both an investor and operator so they also had thoughts on the New York office and retail leasing markets.
There have been several reports recently that popular neighborhood grocery store Trader Joe's will be making its way to Houston soon, which made many locals who have visited a location in another market quite giddy. The outfit was started on the West Coast in the 1960's, and has built up a popular cult following ever since. Known for having "innovative" and hard to find foods that just so happen to also taste great, Trader Joe's was also known to be somewhat of a pioneer in its marketing efforts - putting out a newsletter in the 70's mainly about the wines and foods that were sold at the store, as well as having a line of private label products.
For an old-school oil and gas town, there is no shortage of awesome office spaces. The coolest thing is no matter how many great spaces we find, they all have their own unique energy and locations. This weeks feature is Culture Pilot, who is accelerating the design and marketing culture in Houston. Not only is their client list impressive (National Geographic and Style channel - to name a couple), but their commitment to Houston and the community is second to none. They work closely with organizations such as TEDx Houston, Support Local Grow Together. Their latest project is SURGE, a new energy accelerator in Houston. This is pretty exciting as this the first of its kind in Houston and has been a very successful model as TechStars, Y-Combinator, and Capital Factory have proved.