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Landlords are trying not to rent to startups in San Francisco

42floors.com

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Re: Landlords are trying not to rent to startups in San Francisco

#201

Post by steven2012 »

davemel37 wrote: post #177
AlexeyMK wrote: post #158

One solution that is not being discussed is for VCs to offer office space for start-ups. VCs have longer time-horizons (a typical VC fund will be spent over 5 or so years) and appear more stable to landlords. In addition, one of the toughest problems for VCs as I understand is dealflow - when it comes to a super-competitive round, Andreessen or Sequoia will often push other VC firms out of the round by throwing their…

A very clever idea...they dont even need to offer it for free..they just need to sign the lease or buy the building and lease it to their portfolio companies. Edit: this would be a really clever idea for a fund to raise a round just to buy real estate to lease to their portfolio companies. It will give investors a chance at indirectly investing in startups with secure value backing the investment.

It's a clever idea when the market is going up, and a really dumb idea when the market drops underneath them. If they are locked into a very high rate, and the market goes down, which is always does at some point, then people will be questioning the decision since they would either need to force their companies to pay a ridiculous rate, or lose money trying to sublease it at market rate.

The last thing VCs need to be is a landlord.

Re: Landlords are trying not to rent to startups in San Francisco

#202

Post by tzs »

pmorici wrote: post #95
mooreds wrote: post #7

Or, consider starting a company outside of San Francisco. Not just outside of SoMA, actually outside of San Francisco. (I know, I know, blasphemy.) Eventually the price of real estate and labor will be so high that the relative disadvantages of other locations will not matter.

My bet is that Baltimore is poised to become a big tech hub. There was a ton of money spent in the tech sector after 2001 and that is tapering off now and you have a bunch of engineers with 10 years experience and the low cost of living in Baltimore which makes for a lot of opportunity to try things. The city also has a very Art oriented quirky culture like SF had before it priced out all the creative people and a lo…

Speaking of Baltimore, as someone who knows almost nothing about it other than what I saw watching "Ace of Cakes" and from what I see when the city comes up in the news, I came across this map today [1], which left me wondering what is going on there.

It's a map of all murders in Baltimore, filterable by time period, race, gender, district, zip code, age, and cause of death. There are also some yearly charts below on the page.

What is going on with murders? 164 in the last six months, and they seem to be spread widely over the city, with just a couple murder-free sections (including one decent sizes one in the north part of the city, between 83 and 139).

Is those SF like art quirky culture areas, and the tech company areas, in the apparently murder-free areas?

For comparison Los Angeles has had 150 murders so far in 2015, even though it has 6 times the population [2]. Los Angeles county, with 16 times the population of Baltimore, has had 332 murders so far in 2015, so just over twice as many as Baltimore in the last 6 months.

(Both of the sites I cite are pretty interesting. Anyone happen to have a list of similar homicide exploration tools for other major cities?)

Note: I'm not trying to rag on Baltimore. Just astonished at the number and the geographic distribution of the murders there.

[1] http://data.baltimoresun.com/bing-maps/homicides/index.php?s...

[2] http://homicide.latimes.com/neighborhood/la-city/year/2015

Re: Landlords are trying not to rent to startups in San Francisco

#203

Post by brandnewlow »

arielweisberg wrote: post #61
rdl wrote: post #45

Earlier quoted context omitted.

Everyone I've been talking with seems to say "less than 24 months".

Have they been saying that longer than 24 months?

I did YC back in S11 and people were telling us "Winter is coming" even then. Markets are cyclical but it doesn't make so much sense to stress out about it.

Re: Landlords are trying not to rent to startups in San Francisco

#204

Post by chipsy »

nosuchthing wrote: post #157
chubot wrote: post #40

Earlier quoted context omitted.

My hypothesis is that it is a real thing, and it has to do with human behavior. 7-10 years is enough time for enough people to forget the pain of a previous crash. It's enough time for a new generation to arise. There are of course other cycles based on human time scales. In movie soundtracks, there is a rule that you should never insert a song 0-15 years old. It either has to be brand new, or older than 15 years. Wh…

For an artificially structured system of agreed upon rules that are in everyone's best interest to optimize for prosperity, "human time scales" and emotional memory, in economic systems, should have little influence. Especially considering historical blunders and clear lessons that we've learned.

It requires human effort to maintain any emotional memory. If you don't contact your relatives with a card or a call to remind them you exist, you don't enjoy a good relationship with them. And if the government doesn't periodically run campaigns like "don't waste water", people forget to conserve it. These are commons goods that the market doesn't ascribe any value to unless it is directly related to current product and service. Hence, we are flooded with advertising. There is advertising everywhere. But there is no such thing for "remember the last boom and bust."

Re: Landlords are trying not to rent to startups in San Francisco

#205

Post by dylanjermiah »

serve_yay wrote: post #143

Sucks when the free market doesn't work out in your favor, eh.

Rent control and outrageous zoning laws are _not_ a free market. It's funny, and sad, that the two cities who have the most laws in relation to accomodation, NY and SF, are both of the cities who have the highest prices.

Re: Landlords are trying not to rent to startups in San Francisco

#206

Post by crdb »

superuser2 wrote: post #109
ww520 wrote: post #104

Earlier quoted context omitted.

It's not that the bust is coming soon. Startups are notoriously bad tenants as a class, whose life cycle is too short. Signing long lease with them just doesn't make sense. By definition a startup is an experiment to build products and a business in a short amount of time, with one to two years of funding in most cases. 9 out of 10 these experiments fail, so 9 out 10 startup tenants will move out after a short time.…

Even if it doesn't fail and turns into a unicorn, its space needs will rapidly increase and it will still want to move on to bigger and better offices. The entire point of a startup is to not stay its current size - either it will grow wildly or disappear altogether. If you can comfortably occupy the same amount of space for 2+ years, you're not a startup, you're a small business.

Whatsapp? Instagram? Headcount != success.

Re: Landlords are trying not to rent to startups in San Francisco

#207

Post by ebiester »

jerrac wrote: post #123
mooreds wrote: post #7

Or, consider starting a company outside of San Francisco. Not just outside of SoMA, actually outside of San Francisco. (I know, I know, blasphemy.) Eventually the price of real estate and labor will be so high that the relative disadvantages of other locations will not matter.

I wish people would do that. I know when I see jobs that interest me, they're almost always in SF or NYC. Neither location is somewhere I'd flourish. Seriously, what is the actual appeal of SF? I just don't see it.

It depends on who you are.

Consider someone who likes walking to work, groceries, and everything they need; hates driving and owning a car; loves having top caliber arts and entertainment; feels more alive living in a place where people are on the street; and enjoy an evening walking bar to bar drinking with friends and not having to worry about a DUI on the way home, cities offer a lot.

That is Boston, Manhattan, and SF in this country.

(Oh, and I can hold my husband's hand in the city without getting weird stares. That's not possible in many parts of the country.)

Re: Landlords are trying not to rent to startups in San Francisco

#208

Post by mmagin »

AlexeyMK wrote: post #158

One solution that is not being discussed is for VCs to offer office space for start-ups. VCs have longer time-horizons (a typical VC fund will be spent over 5 or so years) and appear more stable to landlords. In addition, one of the toughest problems for VCs as I understand is dealflow - when it comes to a super-competitive round, Andreessen or Sequoia will often push other VC firms out of the round by throwing their…

OMFG, you reinvented the startup incubator!

Re: Landlords are trying not to rent to startups in San Francisco

#209

Post by austenallred »

crdb wrote: post #206
superuser2 wrote: post #109

Earlier quoted context omitted.

Even if it doesn't fail and turns into a unicorn, its space needs will rapidly increase and it will still want to move on to bigger and better offices. The entire point of a startup is to not stay its current size - either it will grow wildly or disappear altogether. If you can comfortably occupy the same amount of space for 2+ years, you're not a startup, you're a small business.

Whatsapp? Instagram? Headcount != success.

Growth in users or revenue does not always cause growth of headcount, but they are definitely correlated, especially in organizations with sales teams.

Re: Landlords are trying not to rent to startups in San Francisco

#210

Post by nasalgoat »

s73v3r wrote: post #145
Johnny555 wrote: post #88

Earlier quoted context omitted.

We've tried and found that remote engineers are less effective, they miss out a lot from group whiteboard discussions, overhearing office chatter "Hey bill, service XX crashed again because of YY (and Mike overhears and says "Oh yeah, I saw YY in service ZZ too and fixed it"), and just general team cohesiveness. In theory we could hire more people for less salary if we had a remote workforce, but we're still a small…

"overhearing office chatter " I honestly do not believe for one second that this is a thing, or that it's a significant thing.

That is half my job as CTO - catching snippets of conversation to help direct my staff outside of direct scrum or meeting times.

Two engineers talking to each other will share far more useful info than they will directly.

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