Three Things Tech Tenants Should Think About
Tech tenants are quickly joining law firms, associations, and government as pillars of DC area office leasing. We asked CBRE's David Ritchey—just tapped to lead the firm's new local technology and media practice—for tips to help tech firms avoid making real estate mistakes.
1) Be Flexible
Signing shorter, more flexible deals is typically the focus, he says. Young tech firms should concentrate on options to expand, contract, or move to a location more conducive to its mission when structuring leases; locking into a longer-term deal may hinder that. Plus, if a firm grows fast enough, real estate needs can change drastically, David says: "Expansion for high-growth tech and media tenants can quickly become a national and even global discussion."
2) Minimize Upfront Costs
Keeping real estate costs down also aids in keeping a young firm going, David says. So leasing out spec suites, signing a sublease, or taking furnished direct space are all solid strategies over the alternative of unfinished space requiring a costly build-out. "This strategy really appeals to earlier-stage companies focused on investing capital into their business," he adds.
3) Emerging Neighborhood Locations
Tech and media tenants have traditionally been concentrated in established office markets like Bethesda/Chevy Chase, downtown DC, the R-B Corridor, and Reston. But David says tech locations are being diffused across the region as tenants aim to locate near good transportation patterns (including bike lanes) and where employees live. That's why, in DC at least, Shaw, Mt. Vernon Triangle, the Union Market district, U Street, 14th Street, and other less-traditional submarkets are seeing activity emerge as increasingly viable alternatives.