So I just read that the party is over. Venture-backed firms are experiencing down rounds, layoffs, acquisitions, and more. Well, don't tell that to all the venture-backed tech firms that I am currently working with who seem to be doing just fine and in need of space.
The article states that "Rory O'Driscoll, a partner at Scale Venture Partners in Foster City, likened the mood in the Bay Area's startup community to the moment the Titanic hit an iceberg.
"No one wanted to jump into lifeboats right away," O'Driscoll told the Wall Street Journal."
That sounds pretty foreboding! Personally, I too have experienced the collapse on a small scale where two of my venture-backed firms who signed leases last year have already shut down locally or are about to do so. There are grumblings that others may not be adding headcount as previously forecasted. But the comparison to a sinking Titanic isn't a reality in my current circle, yet.
I suspect the slow down will continue but there are too many cutting edge companies being created each and every day that are going to succeed tremendously and reshape entire industries such as Airbnb, Square, and Uber. As long as their growth and path to profitability are realistic, we should see a healthy commercial real estate market.
Now is the time for tenants to contact me to extend their leases or find new office space as securitizing a deal as things worsen will only get more costly. Sure, there is the argument that rates may go down but unless there is a flood of office space in the 2-10,000 square foot range, pricing may not drop dramatically in the coming quarters.
Please ping me with questions about an early renewal, early relocation, or to discuss subleasing surplus space.
