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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

#61

Post by arielweisberg »

rdl wrote: post #45
ChuckMcM wrote: post #10

Earlier quoted context omitted.

Agreed, many landlords seem to feel like the trouble is a mere few months away, although often any attempt at getting them to discuss how they arrived at that conclusion gets something like "I just know it." So one wonders about the whole "wisdom of the crowds" or "herd" in this case, and whether or not they can sense something that isn't showing up in other indicators. I've been looking but other than the extensivel…

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

Have they been saying that longer than 24 months?

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

#62

Post by [deleted] »

buro9 wrote: post #21
astazangasta wrote: post #14

Earlier quoted context omitted.

Eventually we might consider that rent is just outright theft, we're not actually paying for value, landlords are parasites who suck surplus value from the economy, etc.

> we're not actually paying for value The value you are receiving is location. If you do not care for location, then rent office space in Tennessee where you can pay less than 1/4 of SF prices.

[deleted]

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

#63

Post by nroach »

lkrubner wrote: post #38
ChuckMcM wrote: post #10

Earlier quoted context omitted.

Agreed, many landlords seem to feel like the trouble is a mere few months away, although often any attempt at getting them to discuss how they arrived at that conclusion gets something like "I just know it." So one wonders about the whole "wisdom of the crowds" or "herd" in this case, and whether or not they can sense something that isn't showing up in other indicators. I've been looking but other than the extensivel…

As James Surowiecki makes clear in his book "The Wisdom Of Crowds", the wisdom is only apparent in situations where the people are not able to talk to each other. But real estate agents are able to talk to each other. In Surowiecki's telling, if you get a room full of people to write down a guess about how many jelly beans are in a jar, the average of all the guesses will be surprisingly accurate. But if the people a…

Except in this case it's not just a local phenomenon. My company does business in several markets outside the valley (and outside CA) and we are hearing the same thing, often with the same lack of evidence but no direct connection between the sources. That said, I do think there's an industry echo chamber effect.

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

#64

Post by Osiris »

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.

ZenPayroll is opening a Denver, CO office, looking to hire 100 people[1].

[1] http://fortune.com/2015/07/28/zenpayroll-jobs-denver-colorad...

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

#65

Post by rdl »

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?

No. Same people were "no bubble" 6mo ago.

I've been solidly in the "actual value is being created by a lot of companies, mainly because tech (via startups) is destroying existing monopolies", but that's less true of some.

I think SF itself is probably a startup bubble and will correct, but it might just be a "go back to how things were a year ago", not a complete implosion. And the least bad way for this to happen is by sub-sector, like happened with all the shitty social buying apps a few years ago.

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

#66

Post by famousactress »

lkrubner wrote: post #59

There are already several comments on this Hacker News thread where people suggest things like remote work. Others suggest moving to less expensive cities. Someone mentioned Tennessee. "mooreds" made the suggestion "consider starting a company outside of San Francisco". But such comments ignore (are in denial? are in defiance?) what is actually happening, which is described in the 3rd sentence of the linked article:…

"...why the ease of remote work is not offsetting the trend that's moving jobs into place like San Francisco and New York"

Because it's scary. If you're Google or Facebook you don't have to bother with it because people will move to you. If you're startup whatever.io then you want to avoid risk that isn't directly related to your purpose so you probably try to park next to Google or Facebook and work hard on other solutions to the "how do we hire" problem.

That said, it actually is offsetting that trend. It's just doing it too slowly to be noticed, but as someone who's worked remotely for an SF startup for almost 6 years and pays attention to the Who's Hiring remote posts, etc. I can tell you there's been a somewhat dramatic uptick in remote hiring in the past couple of years.

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

#67

Post by fredkbloggs »

ffreire wrote: post #36
nostrademons wrote: post #27

Earlier quoted context omitted.

A lot of this may come from the belief that the economy is only being propped up by the easy money policies of the Fed, and that the Fed is going to start tightening rapidly in the fall. There's a sense that once the tightening starts, everyone will run for the exits at once, and we'll have another 2008 situation but worse.

Your response coupled with your username gave me a shiver, heh. That said, why would the Fed tighten money in the fall when we're so close to an election year? I know they hold longer terms to hopefully avoid political swings, but, it just seems like bad timing.

I'd turn that on its head: keeping short rates as low as they are requires extraordinary economic weakness. The only bad time to raise rates away from zero is when a total collapse is ongoing. None of the recent economic data suggests that a collapse is ongoing; quite the opposite.

You're right that it's bad timing in that their rate increase is likely to come shortly before a bust, and therefore will be second-guessed to no end. But that's the case precisely because it's coming far too late. The solution was to normalize rates near 2% during 2013 and then raise them slowly from there as data improved, not to delay further. Normalizing policy sooner would have limited the overheating this article is all about and therefore limited the impacts of the coming bust, perhaps even to a sub-recession level. Further delay will make things much worse.

The election is irrelevant to an independent central bank, and in any case the major elections are (not that you'd know it from reading the MSM) 15 months away.

The best time to raise rates was a long time ago. The next-best time to raise rates is now.

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

#68

Post by mbillie1 »

lkrubner wrote: post #59

There are already several comments on this Hacker News thread where people suggest things like remote work. Others suggest moving to less expensive cities. Someone mentioned Tennessee. "mooreds" made the suggestion "consider starting a company outside of San Francisco". But such comments ignore (are in denial? are in defiance?) what is actually happening, which is described in the 3rd sentence of the linked article:…

All fair points, but remote work also has increased massively ( http://fortune.com/2015/02/12/lessons-learned-from-3-compani... ). It is interesting to consider that well-paid remote workers, free to live where they choose, may also be choosing to live in these bigger cities. I'm fully remote and I live in a city, albeit a relative small one (SLC), when I could easily pay a ~$300/mo mortgage for a small rural house in the middle of nowhere if I chose to. I suspect that re-centralization is orthogonal to, rather than antithetical to, remote work.

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

#69

Post by beatpanda »

dataker wrote: post #39

While in SV, I couldn't understand the hate towards East Bay: it's fairly priced, close to the 'hub' and not as violent as otherwise portrayed. Could anyone elaborate?

90% racism but people will talk in endless circles to avoid admitting it.

Also, sssshhhh. Stop with the hype. Ruining one city is enough.

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

#70

Post by beambot »

stephengillie wrote: post #25
s73v3r wrote: post #15

Remote work and starting the company elsewhere are pretty easy solutions to this problem.

If all of your employees are remote, what do you show your investors, partners, board members, and creditors when they want a tour of your facility? How do you show them that you've got smart people working on hard problems? For some (bad?) startups, this is an even more valuable function of engineers than engineering.

> what do you show [important people]...?

Profits.

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