SAN FRANCISCO-Technology companies are leading the charge in job growth. That is a phrase we are hearing more and more of these days, said moderator Lee Edlund, a partner at Allen Matkins at the recent RealShare Bay Area conference here. And to hear it from the occupier themselves, panelist Jay Bechtel, real estate project executive of Google, says Google for one, has no plans of slowing down the hiring spree.
“As long as we continue to hire, we have an unlimited demand for space,” explained Bechtel. “We have been in an acquiring mode for pretty much my entire time at the company (eight years). Our hiring graph is still going up and the supply graph matches it.”
Headcount forecasts is difficult to predict, Bechtel said, but “As long as the headcount demand continues, nothing will change.”
Google isn't the only firm ramping up. Each of the panelists, who work with technology clients in the area, say tech tenants are hesitant to sign longer than a one-year lease, without some serious flexible growth options.
“The biggest thing you can do for your tech client is provide flexibility. A year is an eternity for these companies,” explained Nick Slonek, principal and managing director of Avison Young. “If you are talking about a five-year to 10-year term, they need flexibility for their growth.”
In addition to having subleasing flexibility, tech tenants want to be able to expand in the building they are leasing in. “If they are putting money into building it out, they want to be able to expand and double or triple before the lease is up,” said Jenny Haeg, founder and CEO of Custom Spaces Inc.
Haeg added that companies she works with also want to be located near each other. “San Francisco is such an ecosystem that they all help each other out, so they don't want to be isolated.” Secondary to that, she said, location close to public transportation is also key. Another important need, Haeg added, is maintaining a tech tenant's unique culture, something she detailed in an exclusive Q&A recently on GlobeSt.com.
One challenge for a tenant like Google, is creating their own leverage. “A lot of times when we acquire a building, we don't know who will move in, but we know we have the demand for it,” says Bechtel. “Everyone wants to be close to headquarters, so the challenges are accommodating that and finding the large sites in the area. The demand is always to be close to home.” Another challenge, he said, is that some of the requirements are now becoming non-traditional requirements, adding to the difficulty of finding the right space in the right location.
Another challenge, according to other panelists, is finding space that can be both collaborative and focused. According to Paul Woolford, SVP and design principal of HOK, “a lot of the tech occupants have recently come out of the institutional environment and they want both the private heads down thinking, research space, and they might be tearing things apart and putting them back into another space. Or they might need conference rooms, but they might need an environment that is an open collaboration zone. So the program for what people need in spaces is inventing itself over from what is was five years back to 50 years ago.”
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
