Startups Offer Business Growth for Commercial Real Estate Agents


The startup client can become a very lucrative niche for the commercial real estate agent who has vacant properties to fill and wants to see a good rate of business growth. With an average lifespan ranging from a just a few months to just a few years, many startups will bloom quickly or die. The startups that are fortunate enough to bloom will need to add additional talent, immediately. When this happens, the kitchens and basements become too crowded to be productive and suddenly, the startup has become a prime candidate for the lease or rental of commercial properties, especially those that have been sitting vacant or lack cosmetic appeal. 

How the Startup Client Can Differ from Other Clients
The very nature of the fast-paced business growth environment that startups must operate in makes them different from the traditional commercial real estate client. Their needs and goals are completely different, therefore the spaces they seek to lease or rent, are different, as well.  

Traditional commercial real estate clients are usually looking for a site that will satisfy their needs and offer good business growth potential for many years. Build-out allowances, custom color schemes, and details that will make their customers comfortable are very important to them, and most are prepared to negotiate these upgrades into their leases and rental agreements. 

The startup, on the other hand, is not as concerned with making people comfortable, pleasing color schemes or even attracting the attention of walk-in or drive-by customers. Instead of negotiating a build-out and waiting for weeks to have the work completed, they simply want to see a clean, adequately sized space, usually with a somewhat open floor plan, that will allow them the all the room they need for fostering their business growth. Every business has its needs and vision, so regardless of whether the business in question is a startup or an established player, there needs to be a degree of flexibility between the building owner and the agent operating on behalf of the business.

Giving Startups What They Need Means Business Growth for Both of You
The majority of startups will take the paint and carpeting as-is, but will insist on excellent connectivity. Most of these companies are out to make a name for themselves in the high-tech world, so the more bandwidth, the better. In addition, updated electrical wiring capable of supporting a large number of computers and data equipment is a necessity, as well. 

Leasing 101 - Retraining Owners to Attract and Profit from Startups
Property owners may initially shy away from startup tenants because they are typically short-term renters. However, properly managed, the startup tenant can still fuel business growth for the owner and their agent. 

Leases must be short-term, and most startups are willing to consider paying a higher rate for this option. Typically, a 6 to 12 month lease is acceptable for most startups, and many are open to month-to-month agreements with a 60 day kick-out clause. Since, in most cases, the owner is not being asked to customize the building with expensive build-outs or pay for new carpet or paint, this can be a great way of getting a return from spaces that have been hard to rent to long-term tenants. 

In some cases, building owners will consider letting a company use rental space in exchange for stake in the company. This is fairly unconventional but provides flexibility when money is tight for a startup. While this route may not be for everyone, trading space for equity in a company can have great advantages.

Short-Term Opportunities for Business Growth Add Up
While finding and attracting good quality, long-term tenants is the key to success in the world of commercial real estate leasing, vacant buildings make no money for the agent, and actually cost money for the owner. Learning to attract and accommodate short-term, non-demanding tenants, such as startups, can certainly become a golden opportunity for all parties involved. 

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