Reducing Chaos in Leasing an Office

After more than 30 years advising tenants in the San Francisco Bay Area, I’ve seen how tech startups approach office leasing.

It’s messy. Messier than it needs to be.

The problem is usually experience. Leadership teams may have never leased an office before, and responsibility often falls to someone who has little or no real estate background. Ironically, the companies that most need experienced advice are often the least likely to know how to find or use it.

The first mistake is timing.

Startups move fast. Funding closes, hiring accelerates and suddenly the company needs more space. But finding an office is only one piece of a much larger process. Design, construction, permitting, furniture, IT, security, insurance and moving logistics can all stand between signing a lease and actually occupying the space.

When companies underestimate that timeline, they panic.

That leads to the second mistake: engaging multiple brokers to chase whatever “good space” might be available.  An understandable reaction but one that only compounds the challenge.

The greatest leverage in a lease comes from creating competition among landlords. That requires a coordinated strategy. When six brokers are showing six different spaces, each broker is naturally focused on the opportunity they introduced. No one is managing the entire process on behalf of the tenant, and no one is systematically forcing landlords to compete.

The result is less strategy, less leverage, and fewer concessions.  All while missing the critical insights of an impartial advisor who can evaluate all options to help understand which is truly best.

Instead of a disciplined progression from requirements to market survey to negotiation to execution, the process starts to resemble a pinball machine: bouncing from one option to another without a clear plan.

We saw the same thing during the dot-com boom of the late 1990s and early 2000s. Companies moved quickly, often without enough discipline or understanding of the commitments they were making.

Today, we’re seeing it again.

Tenants negotiate terms on multiple buildings, ask landlords to begin drafting leases, then decide they don’t need the space. Others agree to economics or lease provisions they don’t fully understand and end up with offices that don’t fit the companies they are building.

Experienced companies tend to approach things differently. They establish their requirements, engage an advisor, understand the market, create competition and move through the process deliberately.

Startups can do the same.

That is one reason we created TenantSee.co: to give tenants a place to get organized before making major real estate decisions. The site includes tools to help companies understand markets, estimate how much space they need and build a realistic project schedule.

It’s free, with no strings attached.

Start at the beginning. Define what you are trying to accomplish. Give yourself enough time. Understand the market. And put an experienced advisor on your side whose job is to help you make the right decisions.

Remember, this isn’t about getting an office, it’s about leasing the right office, the one that will add value to your company.