Pain From Tech Wreck Spreading to Real Estate-Related Firms

LOS ANGELES-The dot-com shakeout that has already cost some California landlords millions of dollars in lost rent is now spreading to other real estate-related companies, as firms ranging from architects to ad agencies struggle to collect huge sums of money for work they performed when times were better.

Most of the firms who’ve been left holding the bag by troubled tech companies don’t want to talk about their woes, fearing it will scuttle what little chance they may have of collecting even a fraction of the money that they’re due. “Whining to the press about how we got stung won’t help our chances of getting paid back,” says one architect who is owed a combined $700,000 by two downsizing dot-coms that hired his company to remodel their office space last year.

To be sure, such service providers are in a tough spot. While most landlords can move against a failed tenant’s letter of credit or other security to collect at least a portion of what they’re owed, architects, marketing firms and the like rarely have such fallbacks.