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This post really underlines my own experience of trying to find an office space for a startup in London. There are so many sharks out there, and everyone tries

This post really underlines my own experience of trying to find an office space for a startup in London. There are so many sharks out there, and everyone tries to get you to sign a 3 year (or more!) lease. We might not be around in 6 months! But co-working spaces are sometimes just as bad, especially the ones which are basically just feeder funnels for landlords who want you to upgrade to one of their serviced offices / large units (looking at you, ClubWorkspace). I think what Spacious is doing is really cool therefore - and I'll definitely be trying out the service when our current office space expires at the end of March :)

tmwatson100 13y ago
Cheers! I'm the co-founder of Spacious. The company itself came out of months of talking to startups and this blog was the result of us finally having the time to articulate it.
logicallee 13y ago
"No, no, NO. We can't sign a 1-year lease - you don't get it. We might not be around in 6 months!" lol for honesty.
Gusfoo_2 13y ago
> This post really underlines my own experience of trying to find an office space for a startup in London I didn't find it hard. We got a serviced office near Farringdon tube via a broker. (flexi offices) after looking at about 10 places in the arc from there to Old St. Signed a 1-year lease with a 6-month break, just in case things went south.
- atoosh 13y ago
  Appreciate your response Gusfoo!It's awesome that you found an office quite easily! We have received a lot of feedback from those who have found it difficult, especially to do this online and that's what we're trying to fix.
roel_v 13y ago
"We might not be around in 6 months!" What kind of premium were you prepared to pay for this risk to the owner? If your answer is <10%, or even <50% depending on the actual amounts we're talking here, do you find it irrational that you had trouble finding an office?
- mattmanser 13y ago
  What risk? That they'll have to pay advertising again? Because if you don't move in, it's still empty.
  - mkohlmyr 13y ago
    Assuming no-one else wants the space. If no-one was interested in or willing to sign a 3 year contract they wouldn't be able demand it.
    - tmwatson100 13y ago
      Absolutely agree. There are still plenty of companies out there who have the relevant covenants and ability to sign that 3 year lease. However, as the economy evolves and high growth companies companies become the norm the number of people willing to commit to a 3 year lease will start diminishing. This not just because they are not able to forecast their financials, but they are not able to forecast their staff numbers either. It's an interesting time for commercial property and it'll be intriguing to see how this plays out.
  - tmwatson100 13y ago
    Hi Matt, Completely agree. At the end of the day markets depend upon supply and demand forces. The economic landscape looks much different to what it did 10 years ago. Smaller companies that need contract flexibility are springing up everywhere, and the demand for flexible space is increasing. There's only so long this can be ignored by those operating or owning commercial space.
  - roel_v 13y ago
    This post just shows that you have never let out any real estate. Let me tell you, it's not as simple as this. It's not just the 50$ or whatever to put up one online ad. You need to advertise on several websites plus offline. You need to show around various candidates, and do background checks on the serious ones. You have to transfer utilities, deal with mail, and other assorted tasks when somebody moves in. All of this for (in terms of yield) slim margins. And assuming that nothing is damaged or needs fixing up after somebody moves out. Now, for commercial space it gets worse. When they go out of business, it's highly unlikely that you will recover the owed rent - likely several (2-3) months. Commercial real estate is vacant for longer, and having a tenant 'in between' basically 'resets' the cycle of getting a new tenant. (businesses take a few weeks to months before deciding, residential is usually faster, i.e. faster turnover) Also, businesses usually make changes when they move in, not always for the better (network rewiring, dividing space etc for offices - for storefront it's much worse still). If they go bankrupt, you as the owner are stuck with the cost of repairing. The deposit (a paltry 2 or 3 months rent) is usually not sufficient. Again, all of this is assuming that there are no 'real' troubles - no lawyers involved, no 'real' renovations needed after they move out, ... Just the cost of getting somebody to dispose of an abandoned office full of furniture costs a month rent, because second-hand office furniture isn't worth anything! For me, I don't bother with terms of < 6 months for rentals, not even for a 100% premium (residential that is, I don't do commercial). And 1-year leases I only take as a 'probation' period, if it's clear from the beginning that they have no or little intention on staying longer, I won't accept such a candidate. Financially it just doesn't make any sense, and I'm not even counting the stress and the hassle.

tmwatson100 13y ago

Cheers! I'm the co-founder of Spacious. The company itself came out of months of talking to startups and this blog was the result of us finally having the time to articulate it.

logicallee 13y ago

"No, no, NO. We can't sign a 1-year lease - you don't get it. We might not be around in 6 months!" lol for honesty.

Gusfoo_2 13y ago

> This post really underlines my own experience of trying to find an office space for a startup in London I didn't find it hard. We got a serviced office near Farringdon tube via a broker. (flexi offices) after looking at about 10 places in the arc from there to Old St. Signed a 1-year lease with a 6-month break, just in case things went south.

atoosh 13y ago
Appreciate your response Gusfoo!It's awesome that you found an office quite easily! We have received a lot of feedback from those who have found it difficult, especially to do this online and that's what we're trying to fix.

roel_v 13y ago

"We might not be around in 6 months!" What kind of premium were you prepared to pay for this risk to the owner? If your answer is <10%, or even <50% depending on the actual amounts we're talking here, do you find it irrational that you had trouble finding an office?

mattmanser 13y ago
What risk? That they'll have to pay advertising again? Because if you don't move in, it's still empty.
- mkohlmyr 13y ago
  Assuming no-one else wants the space. If no-one was interested in or willing to sign a 3 year contract they wouldn't be able demand it.
  - tmwatson100 13y ago
    Absolutely agree. There are still plenty of companies out there who have the relevant covenants and ability to sign that 3 year lease. However, as the economy evolves and high growth companies companies become the norm the number of people willing to commit to a 3 year lease will start diminishing. This not just because they are not able to forecast their financials, but they are not able to forecast their staff numbers either. It's an interesting time for commercial property and it'll be intriguing to see how this plays out.
- tmwatson100 13y ago
  Hi Matt, Completely agree. At the end of the day markets depend upon supply and demand forces. The economic landscape looks much different to what it did 10 years ago. Smaller companies that need contract flexibility are springing up everywhere, and the demand for flexible space is increasing. There's only so long this can be ignored by those operating or owning commercial space.
- roel_v 13y ago
  This post just shows that you have never let out any real estate. Let me tell you, it's not as simple as this. It's not just the 50$ or whatever to put up one online ad. You need to advertise on several websites plus offline. You need to show around various candidates, and do background checks on the serious ones. You have to transfer utilities, deal with mail, and other assorted tasks when somebody moves in. All of this for (in terms of yield) slim margins. And assuming that nothing is damaged or needs fixing up after somebody moves out. Now, for commercial space it gets worse. When they go out of business, it's highly unlikely that you will recover the owed rent - likely several (2-3) months. Commercial real estate is vacant for longer, and having a tenant 'in between' basically 'resets' the cycle of getting a new tenant. (businesses take a few weeks to months before deciding, residential is usually faster, i.e. faster turnover) Also, businesses usually make changes when they move in, not always for the better (network rewiring, dividing space etc for offices - for storefront it's much worse still). If they go bankrupt, you as the owner are stuck with the cost of repairing. The deposit (a paltry 2 or 3 months rent) is usually not sufficient. Again, all of this is assuming that there are no 'real' troubles - no lawyers involved, no 'real' renovations needed after they move out, ... Just the cost of getting somebody to dispose of an abandoned office full of furniture costs a month rent, because second-hand office furniture isn't worth anything! For me, I don't bother with terms of < 6 months for rentals, not even for a 100% premium (residential that is, I don't do commercial). And 1-year leases I only take as a 'probation' period, if it's clear from the beginning that they have no or little intention on staying longer, I won't accept such a candidate. Financially it just doesn't make any sense, and I'm not even counting the stress and the hassle.