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Start-ups Have an 'Apartment-Search' Mindset

NEWPORT BEACH, CA—Startup companies want space quickly and are looking for move-in-ready, plug-and-play office options, TenantBase's CEO Bennett Washabaugh tells GlobeSt.com in this EXCLUSIVE look at why this service provider is expanding.

By Carrie Rossenfeld | carrierossenfeld | | Updated on April 28, 2016
Bennett Washabaugh Washabaugh: “Our user data shows start-ups beginning the office search 15 to 45 days, on average, prior to needing space.”
NEWPORT BEACH, CA— Start-up companies want space quickly and are looking for move-in-ready, plug-and-play office options, TenantBase ‘s CEO Bennett Washabaugh tells GlobeSt.com. The firm, a platform that helps local companies find and lease office space, has recently graduated from incubator EvoNexus and moved into its own office off of MacArthur Blvd. here, marking the next phase of the company’s Southern California expansion. We spoke exclusively with Washabaugh about what start-ups need in office space, how they can grow and how they fit into the Orange County office market. GlobeSt.com: What are start-ups’ most important office needs? Washabaugh: Start-ups want to build their company culture in spaces that foster collaboration and creativity for their employees. Since we launched TenantBase, we’ve seen that newer start-ups have an “apartment-search” mindset. They want space quickly—our user data shows start-ups beginning the office search 15 to 45 days, on average, prior to needing space. As a result, many are looking for move-in-ready, plug-and-play office options. For earlier-stage companies, flexibility is a must, so executive suites and co-working spaces are always a great option (although they can be expensive in terms of price per square foot). For companies graduating to their first real office, select developers continue to provide spec suites that make the leasing process much more efficient and timely. In Orange County, the Irvine Co. and Olen Properties are offering phenomenal options for maturing start-ups. As a result, TenantBase completed more transactions with these developers than any other landlords in March. Irvine and Olen Properties had approximately three times as many property views from our customers than the entire rest of the market. Limiting deal points and construction variables works for small tenants, and I am sure we will have even more data to support that in Orange County in the upcoming months. GlobeSt.com: Where in Orange County can these needs be met? Washabaugh: There are options available throughout the market, but demand from small businesses and newly funded start-ups currently outweighs the supply of relevant small space for these companies. In March, we had ~200 companies sign up to use the TenantBase brokerage experience in Orange County alone, demonstrating strong immediate demand for office space less than 5,000 square feet. Adding liquidity to the small-space marketplace has been our goal from the day we started TenantBase, and we are confident that we can utilize tenant demand to help landlords provide more-relevant small-space options in OC over the coming months. GlobeSt.com: How do you foresee the future of start-ups in this market? Washabaugh: There has never been a better time in Orange County to start a business or operate a start-up. We even moved our management team to Orange County from Nashville because the market is experiencing so much momentum within the small-business and technology sectors. There are more resources being poured into the start-up community in OC than ever before. Incubators like EvoNexus and UCI’s center for innovation “the Cove” continue to help set up entrepreneurs for success. Compared to San Francisco and Los Angeles, Orange County offers less-expensive real estate and labor costs for tech employers and a great quality of life for tech employees. Furthermore, this is one of the most educated workforces in the country. The market here is ripe for business creation and sustained growth. GlobeSt.com: What else should our readers know about start-up office space? Washabaugh: If you are a start-up or small business looking for office space, don’t get discouraged, start early and hire a broker. Even if you do not work with a TenantBase broker, there are way too many “land mines” for tenants trying to find space themselves and far too little information online to make informed office decisions. As a start-up ourselves, our office expenses in Orange County and Nashville are our biggest costs besides wages for our employees. We know how costly making the wrong office decision can be for a new company, so educate yourself on the market so that you understand what you are signing.

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