Our mothership NAI Global recently delved into tech life in their blog post: “How to Attract the Tech Industry to Your Office Building: 4 Ways.”
That got us thinking…
Here in Northern California, we’re the beta testers for all things tech. For much of the past 20 post-dot-com-boom years, we’ve been in a symbiotic petri dish of innovators and early adopters, such that our norms are often several months ahead of mainstream tryouts. Things like smartphones, social media, ride hailing, or scooter shares…they all became part of our can’t-live-without everyday lives before much of the rest of the country knew what they were.
So we thought, “What are we experiencing here with tech office properties that the average market might not be seeing yet?”
We came up with four (more) things to think about when pitching a property to tech companies:
Unless it’s a huge campus or data farm for a titan, chances are you’ll be dealing with new and emerging companies. Whatever that company needs today won’t serve it for long. The startup will either succeed and need more, or fail and need a way out. Roughly 90% of startups ultimately fail, 1.5% become wildly successful “unicorns,” and an estimated 16% get acquired (for those of you doing math, some acquisitions are fire sales and still considered failures).
Theoretically, by the time a startup is looking for office space, it has transcended the garage/cafe/WeWork phase and has reached some level of success. But you can be sure it’s still on a breakneck do-or-die trajectory that will quickly leave it needing either more or less office than it starts with.
That’s a very different reality than we’re used to in commercial real estate, and our advisors aren’t in the game of brokering six-month leases with month-to-month options. But this is where “disruptive” thinking can separate you from your competitors. Can you negotiate terms that allow for growth or protect against failure? Can you build a pipeline of potential sublessors? Can you invent a solution that’s not typical?
Do UX Research
User experience—UX—has become the most critical element of tech. It doesn’t matter how good your product is if users don’t enjoy interacting with it. Companies put tons of resources into researching UX before they ever go to market.
You should do the same with your property, because your client will.
Do empathy and ethnography testing. Figure out what someone’s lifestyle would be like with the property regularly integrated into it. Is it safe and comfortable to get home by public transit at 11:30 pm after working late? Is there a great course nearby for a lunchtime run? What’s the air quality like? Say your town has neighborhoods for hippies, yuppies, parents, hipsters, LGBTQ folx, and a half-dozen various ethnic communities…where are this company’s employees spending their time?
Learn the persona of a company’s people, and sell how that fits your offering.
Know the Politics
That word “disrupt.” Techies love it. They love the thrill of destroying some monolithic status quo with a new idea. But some have also tended to disregard the consequences.
In San Francisco, the City gave tech companies huge tax breaks to lure them in (does your area have any incentives?). But now that they’ve landed, the protests have followed.
For example, many companies strive to offer every thinkable amenity in the “office,” creating a full-service mini-community their employees never really have to leave. Dry cleaning, salons, bars, restaurants, general stores, gyms…virtually anything their people need is under the company roof.
The problem? It’s putting nearby small businesses out of business, and displacing neighborhood “character” with a cadre of workers perceived to be cult-like zombies. In San Francisco, they’ve come close to banning such in-office amenities.
Delivery companies are hurting local restaurants. Uber fully ignored taxi regulations in its markets. Scooter shares disregarded sidewalk safety. Gentrification. Housing crises. Cost-of-living surges. Traffic and parking congestion. All have garnered intense political push-back. Right now on San Francisco’s primary ballot, Proposition E would put a moratorium on any new commercial office space until the housing was built to accommodate those new workers.
Can you foresee any side effects a client may have conducting their “disruptive” business in the space you’re showing them? Insights like that will separate you from other brokers.
Know the Neighbors
A crowd attracts a crowd. Game recognize game. The Bay Area has attracted tech companies because it has tech companies. They want to be near common vendors, customers, clients, employees and investors. More importantly, they want to be near the kind of like-minded people who speak a common tongue and think it’s perfectly normal to go on a dopamine fast.
If you’re trying to draw a tech company into your space, can you sell them on the similar companies and lifestyles nearby? Can you sell the vision of the area becoming something bigger?
You’re Selling a 360-Degree Experience
Work-life balance is no longer just a nice option. Skilled tech employees are in high demand and can work wherever they want, literally. Your challenge isn’t just to sell an office, but to sell a workspace that meets every need, fits a lifestyle ideal, and fulfills an identity. Not an easy job.
Fortunately, you’re really good at it…