Real Estate Status Report San Francisco

This is a short Real Estate Status Report for San Francisco. I am not a Real Estate Broker! I am leading a small Start-Up Company in SF, WildGigs. We are looking for new Office Space in SOMA. We have a need for 3000 up to 5000 square foods.

When I started with WildGigs in SF end of 2010, we moved into a Regus Office on the Montgomery Street. Regus is awesome. You get the full service. Furnished Offices with Telco. & Internet in a representative neighborhood with short term lease. You can cancel your lease every month.

The only thing you need to start is your Laptop. But it is pretty expensive! For 2 small offices with 5 desks you are paying nearly 5000 USD per month.

When me moved into the Regus Office nearly the half of our floor was empty. At the time we moved out, 3 months later, our floor was full with Start-Up companies. Even it is so expensive.

Now we are located on the Market Street & 1st Street and we are looking again for new office space.

This is famous Map of Silicon Valley.

Nearly every big tech. company in the world has a office here. And between all the big players there are thousands of small Start-Ups. The economy for the tech. sector in the US is growing since 6 months. That means the VCs are opening the pockets and there are more and more Start-Up companies who are looking for office space. Because of that the Land Lords are increasing the rents. This trend will maybe continue the next 2 or 3 years.

The buildings in SF are categorized into class A, B, C, D and E buildings. This is a class A building

This is something what the most Start-Ups don’t want! Skycrapers are not for creative people! Skycrapers are mostly for lawyers and insurance companies. The most Start-Ups are looking for class B buildings in SOMA, with 3k up to 5k square foods. Buildings like this.

Old warehouses with bricks, big windows and high bright rooms. This are the buildings there the creative people with Mac Books are hanging up!

Another Problem is, that the big players are growing and need more office space, too! Zynga for example rented additional 250 000 square foods in SF! This guys are growing like crazy!  And Twitter also rented a whole building on the Market Street. That means there is not so much out there on the Market Street.

To find something by yourself is nearly impossible. You have to work with a Real Estate Broker! And if your broker is showing you some cool office space, you have to react really fast! That means you have to make a decision in the next 24 hours. If you don’t take it, 2 days later is taken by one of the other thousand Start-Up in SF.

If you are visiting a new office space you should have this papers here ready:

  1. power of attorney  or authorized signatory.
  2. Balance sheet
  3. Dunn & Bradstreet number :  Tx ID and IRS registration
  4. Credit report / Credit score
  5. Profit / Loss statement
It is not enough to have a lot of money on the bank account. At the .com bubble the most Start-Ups had a lot of money on the bank account, because they got funding from Angel Investors. But a couple months later all the money was burned. The Land Lords learned from this experience. The Land Lords want to see a good credit history and some kind of history. That makes the situation for young Start-Ups even more difficult.

Published by Robert Reiz

CEO @ VersionEye. Passionated software developer since 1998.

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