Landlords are trying not to rent to startups in San Francisco • Hacker News Board

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

#231

Post by tayo42 » Fri, Jul 31, 2015, 3:37 AM UTC

compostor42 wrote: post #154

tayo42 wrote: post #142

Earlier quoted context omitted.

No, I don't know why people always say that. I live on less then half that. I eat out, drink, do stuff on weekends and pay my school loans and bills. Thats like 7000 a month? If you can't get by with that comfortably high cost of living is not your issue...

If you don't mind me asking, what are you paying for rent? Been considering moving out there so trying to get a feel for things.

700 for a a tiny room in a house. Were talking about minimum wage style living... I could spend up to ~1900 on a apartment. Just haven't been able to find one. It's real competitive to get a place. Day to day expenses don't seem any different to me then when I lived in NY. Except wine, bottles can be as low as $4.

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

#232

Post by pd1 » Fri, Jul 31, 2015, 3:42 AM UTC

Domenic_S wrote: post #79

Obi_Juan_Kenobi wrote: post #58

Earlier quoted context omitted.

East Bay is great. Oakland is starting to look like a decent city. Doesn't mean there aren't real disadvantages, but it's something most people/startups should at least consider.

the East Bay is way bigger than Oakland/Berkeley. Walnut Creek, Pleasant Hill, the Lamorinda area, Danville, Pleasanton -- all very nice, safe towns with good bart access. No startups there though.

Those places are pretty far from SF though. Not unbearable, but you're probably looking at >1hr door to door.

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

#233

Post by developer1 » Fri, Jul 31, 2015, 3:49 AM UTC

ww520 wrote: post #104

fredkbloggs wrote: post #3

This is a great analysis and the argument makes perfect sense in every respect. The only thing I find dubious is the idea that the bust is 2-4 years out. I think if you polled most SF commercial landlords, they would tell you that they expect most of their startup tenants to start having difficulty paying the rent in no more than 18 months. It would be interesting to see some actual data on this. After all, there's n…

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.…

I wish you'd talk to the owners of a company I worked for. After 4 years in business, they continued to interview people for positions at a "startup", requiring candidates to agree to stay late or work on weekends to make the business succeed.

4 years in, no profit. After 5 years, they became "profitable before marketing costs", which was the largest business expense (in the millions).

Huh. I should dig and find out if they still call themselves a startup from 2009.

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

#234

Post by zeckalpha » Fri, Jul 31, 2015, 3:54 AM UTC

flashman wrote: post #185

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…

How likely is a startup to trade points for office space? As in, a different class of VC which backs the company not with cash but with a location.

Another way to do it would be a startup specializing in office space. Oh, wait? 42floors?

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

#235

Post by scurvy » Fri, Jul 31, 2015, 4:05 AM UTC

trjordan wrote: post #102

swehner wrote: post #83

Earlier quoted context omitted.

Like Oakland. Can get to SF by BART if needed.

Not this weekend, you can't!

Nor on Labor Day

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

#236

Post by scurvy » Fri, Jul 31, 2015, 4:07 AM UTC

ebiester wrote: post #207

jerrac wrote: post #123

Earlier quoted context omitted.

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, an…

SF has top quality arts & entertainment? I'm from New Orleans so I'm spoiled, but the live music scene in SF is the pits. Stern Grove is cool, but it's only during a short time of the year. The SF ballet is excellent, but most other A&E things fall way, way short of other US cities.

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

#237

Post by scurvy » Fri, Jul 31, 2015, 4:08 AM UTC

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…

If crime didn't matter, New Orleans' tech scene would blow up a lot more before ballmers.

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

#238

Post by jane_is_here » Fri, Jul 31, 2015, 4:15 AM UTC

fredkbloggs wrote: post #3

This is a great analysis and the argument makes perfect sense in every respect. The only thing I find dubious is the idea that the bust is 2-4 years out. I think if you polled most SF commercial landlords, they would tell you that they expect most of their startup tenants to start having difficulty paying the rent in no more than 18 months. It would be interesting to see some actual data on this. After all, there's n…

A relative of mine made the mistake of renting to a start up. Rent has not been paid for several months. Legal proceedings have started. ( This is in a country where evicting tenants is notoriously difficult. )

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

#239

Post by owyn » Fri, Jul 31, 2015, 4:31 AM UTC

kspaans wrote: post #212

owyn wrote: post #181

Earlier quoted context omitted.

Well, let's do some calculations... Assume you're making 140k, after 10% retirement contribution and CA taxes leaves about $6400 per month net. With the average 1 bd apartment at $3200 now that's half your take home wage. Leaving $3200 per month is $800 / week. Or $20.00 an hour at 40 hours. Given typical start-up hours and not even counting the typical food/internet/car expenses. So, if you want to look at it as an…

Wowza! So at $140k/year the effective tax rate in CA is around 40%? (Or maybe my math is bad.) EDIT: And some that may not all be income tax? E.g. in Ontario one pays fed income tax, provincial income tax, Canada Pension Plan, Employment Insurance, and a few other I may have forgotten. In London, UK one pays income tax, national insurance, and council tax (property tax paid by property occupiers).

At that income level, the federal tax is %28 and CA is %9.3, so about %37 yeah. Max is 33+12 = %45. There's also ~9% sales tax in most parts of california but every time you go out you better tip %20.

And for all that, we get to pay for our own health care and retirements too!

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

#240

Post by InclinedPlane » Fri, Jul 31, 2015, 4:31 AM UTC

farooo123 wrote: post #140

Why not sign shorter term leases??

In SF? All they have to do is wait 10 seconds and someone else will be around to rent to. Rent is going up while vacancy rates are plummeting, that's a landlord's market.