Articles About Commercial Real Estate

The Urban Land Institute (ULI) recently polled over 700 real estate professionals to find out where are the best places to invest in real estate in the next year.  San Francisco landed at the #2 best place, only beaten by Seattle!  They note that "The City by the Bay learned from the tech crash of 2001 not to overbuild. There is a reasonable supply of office and apartment space, which should limit vacancies. San Francisco's port is also expected to help the city during the downturn as Americans continue to rely on Asian imports."  This is great news because it shows that San Francisco is poised to recover from this economic downturn well ahead of many other cities. 

As Seen on Forbes

Early Stage Essentials: Start Up Access

All early stage companies that find success quickly identify their place in the market and build a solid foundation for growth.  Young companies have a series of issues to tackle right out the gate which determine how stable the company will be and its potential for growth like identifying the right office space and leasing arrangements, finding service providers to build out adequate infrastructure and other essential items that are not part of product development or initial go to market strategies.  

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This newsletter can be found under the "Articles" tab at this URL - http://sfcommercial.com/paul-l.-picciani.html.  Call me at 415-834-3542 if you'd like to further discuss the current office leasing market for San Francisco tenants, which landlords are/are not flexible on rent & terms, and key items & timelines a prospective SF office tenant should keep in mind prior to starting a search process.

Times are tough right now and every penny counts. Yet that old computer is SO slow you're wasting valuable time just sitting there waiting for it.  What to do???

An audit of your computing needs and existing equipment could save you hundreds of dollars (or any other currency). Here are some examples.

Say you're a MicroSoft Windows user (ah, my heart goes out to you, poor thing, but only because I am in the same boat...). Did you know that Uncle Billie's company keeps enlarging your operating system so pretty soon you're out of memory? Your machine gets slower and

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After years of promises of multi-megabit communications from major telecommunications providers, Fiber High LLC, a local 3-person outfit, is now actually delivering. By combining low-cost, no- or short-term lease, shared office space and direct links to the country's fastest public optical fiber network, Fiber High brings serious connectivity within reach of low-budget entrepreneurs and start-ups.

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In follow-up to the Podcast discussion Frank Peters, Dave Berkus and I had a couple of weeks ago (http://www.thefrankpetersshow.com/), a few entrepreneurs wanted to learn a little more about the various channels of raising equity and particularly the characteristics of each channel.

Following is a 10,000 foot level, but focused discussion of the various equity sources:

Friends & Family

Your dad, uncle or a rich body – almost always non-strategic, almost always come with confused valuations and even more confuse structures that will be costly to clean-up later, and often the money raised gets to be wasted on experimentation. It is however, the easiest money to raise since they know you and trust you the most. Raising Friends and Family round generally does give the VC’s and the Angles the warm and fuzzy that at least your relatives and friends trust you.

Angels (individuals & groups)

An individual angles or group of angles that pull together to invest – generally invest as individuals or as an LLC. If you have the right angel or the right lead (if a group) to spearhead the process

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Reading a lease can be daunting and time consuming. But it's an important document and you should know what you're agreeing to when you sign the bottom line. But you're thinking: "I've rented half a dozen apartments without a lawyer. Why do I need to hire one for this tiny office?"

The simple answer comes down to the difference in regulations governing residential and commercial real estate. In residential, if your landlord doesn't deal with a maintenance issue, there is a local rental board that specializes in tenant rights. In commercial real estate, the lease is a formal contract and sets the legal terms moving forward without much regulation.

What does this mean to you?

I have seen extremely landlord-friendly leases that tenants sign without knowing what they are giving up. Some examples of things to look for:

-Holdover: Landlords don't like companies staying long term on a month-to-month lease. To prevent that, they add a clause called Holdover which sets the rent for month-to-month terms after your initial lease expires. Landlords typically ask for 150% but it can and should be negotiated.

-Percentage rent: For retail space, landlords will attempt to receive a percentage of your total sales revenue. I've seen landlords ask for a percentage of the sale price if you sell your business during your lease term.

-Restoration Clauses: Most landlords will ask to approve any improvements completed in the space. What a business needs to be careful of is creating a situation where a landlord demands that a space is restored to its past condition.

-Code Compliance: Spaces need to meet local codes but those codes change constantly. It's important to make sure that you don't agree to bring a landlord's building up to code for improvements you're doing to your space. ADA compliance is very expensive and you do not want to bear the brunt of those costs.

-Personal Guarantees: Landlords will typically ask small office and retail users to guarantee a lease. This is not optimal but sometimes can't be avoided. If you do agree to one, try to have it scale down over time.

These are but a few issues to watch out for, but there are many others. A real estate attorney can help you identify important issues and make sure that you are signing a fair document.

Good luck and feel free to email support@rofo.com with any specific questions.

Listing Suggestions

There are several ways to help a listing lease quicker on Rofo. Below are some tips to help your listing stand out from the rest and lease sooner!

Title

Users on Rofo click on descriptive titles over 74% of the time as their first property choice. Think about words that they would identify with and are descriptive. Try to call out what you feel are the best features of the space and identify them in the title. Some example could be:

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Many people ask me which type of system is better to buy; a system that is digital using standard phone lines, or a VoIP system utilizing IP services.  There is no one answer that suits all situations, but there are a couple guidelines to go by.   For a small business, a digital phone system using standard CO lines is still a great solution because of the amount of bandwith needed to assure quality calls on an IP system.  Standard CO lines are dedicated lines from the phone company, so the quality is managed and pretty much guaranteed.  For best performance on an IP system, DSL does not provide a managed connection, so a T1 is required and is a large investment for a small organization.   Of couse, there is always the option to use an IP system inside connected to CO lines.  This gives you the benefits of IP inside the office, while assuring high quality phone calls.  Drop me an email if you have any questions about the services - terryh@generaltel.com.