This post first appeared on Matt Giffune’s blog, Taking Up Space. Matt writes a thoughtful and candid blog on commercial real estate and technology. If you want to go deeper, you should definitely check it out.
In case you haven’t noticed, innovation is moving remarkably fast all of a sudden. New companies are popping up and making huge impacts on otherwise stable industries. In the last decade alone we’ve seen photography, publishing, music, movies, coupons and travel agencies (too name a few) all dramatically transformed. The world is moving so fast that it’s becoming tough to keep up. And what about commercial real estate? Is our business changing too? You’d better believe it.
It’s not about you.
There are a crop of young startups who are going to change this business by asking a fundamental and selfless question: How can we make people’s lives better? This new cohort understands that everything begins with the consumer and their demand for space. The industry exists to serve that need, by whatever means available. What’s changed in the last few years is that there are a new set of tools available to solve consumer’s problems, and our customers expect that we will use them. There is a huge gap in our business right now between the tools that are available to us and the tools that we are using. Opportunistic startups see the potential to solve problems using these new tools. The gap is so big and so glaring that we are going to see a mad rush to fill the void. You might call this new movement CRE2.
The technology is already here
Often disruptive innovations come along not as a result of brand new technology, but through an insightful reapplication of an existing one. I believe that will be the case in commercial real estate. There are some fancy wiz bang augmented reality, QR Code applications, and 3D rendering tools, and they’re neat. They’re fun toys and they might prove useful sometimes. But if I’m looking to find a space for my business, do they make that process dramatically better?
The problems that need to be solved are actually quite simple. Business and the brokers representing them need accurate and complete information presented in a way that makes it easy to understand and analyze. The revolution in this industry is going to come from people applying existing technology to solve tough problems that maybe aren’t fancy, but that can help people access better information, make better decisions, and form better relationships. The deals are big and important and they require deep amount of trust, skill and knowledge to execute effectively. Technology can help with that.
The Realtor’s Dilemma
Clayton Christensen’s model for mapping disruptive technologies is a great way of looking at how things will change. Firms who are married to their revenue models will be hampered by their inability to subvert their own profits. CRE2 companies are not tied down in this way. Startups, by definition, have no old models to defend. The only legs they have to stand on are better answers to the fundamental question: How do we make people’s lives better? But I suppose that’s true for every firm. Here are a few you should keep an eye on:
When I began searching for my first office space I had a really hard time getting landlords and brokers to respond to my offers. I was fresh out of undergrad and had a crazy idea for starting a co-working space in Gastown. Needless to say I was less appealing to building owners than some of the large advertising agencies that were looking around at the time. Eventually I did manage to get a deal done, but it could have been easier.
Leasing commercial real estate is different from the types of transactions most people are used to. When you go to Safeway and pick out a box of pasta it is pretty unlikely that the cashier will refuse to sell it to you. When trying to lease office space, that happens all the time.
The reason is that landlords want to lease space to well established businesses who will be a benefit to the building. Beyond the obvious pain of collecting on overdue rent, the risk profile of a building’s rent roll determines its capacity to carry a mortgage. As the strength of its tenants’ improves a building might qualify for a larger mortgage at a lower rate, which means more money for the owner. If a well known company, like say Twitter or Deloitte, takes space in a building it brings attention to the address and gives lenders confidence that rent will continue to flow. If you’re a small company with a limited credit history these interests work against you.
One way you can compensate is by putting together a one page summary of why you would make a good tenant. It could be similar to the executive summary from your business plan with emphasis on your credit worthiness. You may want to mention a few high profile clients that you’ve worked with or media outlets that have written about how amazing your business is. Failing that you could include a quick profile of the founders. Anything you can do to demonstrate your credibility is a good thing.
Having a summary on hand when an owner is humming and hawing can help tip the scales in your favor.
The value of commercial real estate in North America is over $11 Trillion. That’s about 100 times the suggested value of Facebook. Despite that there has been very little innovation. Especially compared with some of the awesome projects out there. The industry is left with really poor technologies, which leaves us with an incredible opportunity.
We work with great people.
We like to work with exceptionallytalentedpeople who thrive on solving tough problems. They have come from places like Amazon, Zappos & Apple. We are building a team that cares about the details, that can communicate their ideas clearly and concisely and won’t let their egos get in the way of shipping something truly great.
We love to work hard, and we also love a good pint.
Vancouver is an amazing city and we’re all about enjoying it. We totally believe in getting out of the office to throw around ideas over a cuppa joe, beers after work and taking time to enjoy the mountains.
This is an exciting time, a great project and an awesome opportunity. We hope you’ll consider it.
There is a great new way to manage your search for space on SpaceList. As you search, you can keep track of spaces that interest you by clicking the icons on the top right of each result.
Your spaces are saved under “My Lists”. There you can view your list as a summary or grid, and easily share it via email. You can print your list or export it as a PDF or Excel file. Pro accounts get a white-labelled version which is fully sortable & editable. Create your account & give it a shot!
The arrival of the Canada Line skytrain has created a new midtown epicentre at the corner of Cambie and Broadway. Cross Roads, designed by Busby Perkins + Will was brought online in sync with the new transit station. This LEED Gold mixed use project houses Whole Foods, London Drugs, Milestones, retail & office space. Through the collection of storm water, and water efficient faucets to energy efficient HVAC and lighting systems, Cross Roads is designed to reduce both energy and water usage by 30%.
With over 230,000 square feet of office and retail space at Cross Roads in total, check out Tonko’s listing for a 2,358 square feet office space here on Spacelist.
2015 is a big year for Vancouver’s commercial real estate market. The first round of new office buildings to hit the city in quite some time will be near completion, painting the business district of downtown Vancouver a new colour: green.
745 Thurlow will add to the glamour of the Thurlow and Alberni block with this latest 25 story building. Developed by Bentall Kennedy the buidling will consist of 365,000 square feet of office space and 35,000 square feet of retail. With MCMP at the helm, 745 Thurlow is aiming for LEED Gold. Steps away from the Burrard Skytrain Station and close proximity to bike routes, this building is built with a sustainable vision.
1021 West Hastings snatched the last piece of available real estate on the harbour district. Located between two heritage sites, the Guinness Tower and The Marine Building, this latest development by Oxford Properties is a modern architectural statement. Working with architects at KPF & MCMP this building will have an 8,000 square foot floor plate and reach completion in 2015.
745 Thurlow. Photo from bentalkennedy.com 1021 West Hastings. Photo from Oxford Properties.
The Telus Garden Building will stretch an entire city block between Robson,Seymour, Georgia, and Richards. With a target of LEED Platinum, over 1,000,000 square feet of mixed use space will be built. Telus & their architect, Gregory Henriquez, aim to not only revitalize the neighbourhood, but also boost the local economy with this ambitious development.
The Rogers Tower is expected to come online in 2014. Teaming with Walter Francl Architects and PWL Partnership, the building will be both residential and commercial. According to Aquilini, there are tenants secured for 80,000 of 230,000 square feet.
Credit Suisse Building is set to rise above the Vancouver Stock Exchange Building in 2015. The 30 story LEED Platinum building will add new shine to Howe and Pender block. Stand out features include: waste management facilities, high energy cooling and heating system, and solar panels. The building will have up to 400,000 square feet of available office space for rent.
The Burrard Gateway Development is the latest mixed-use project by Jim Pattison Developments Ltd and Reliance Properties. Linking Yaletown and the West End, three separate towers are expected to house over 190,000 square feet of office space. A planned completion date has yet to be announced.
The 29 stories of Metrotower 3 will add 400,000 square feet of office space to the Burnaby market. This development by Ivanhoe Cambridge will stand 800 feet above sea level, boasting views of the northsore, downtown Vancouver, Mount Baker, and the Gulf Islands. Also built to LEED Certification, this office tower is located next to public transit and the largest retail mall in BC.
Burrard Gateway. Photo from hoodsurf.com Metrotower 3 Photo from skyscraperpage.com
What appears at the corner of West Georgia and Thurlow is a giant concrete waffle. Not literally, but the office tower better known as that, or “MacBlo.” The MacMillan Bloedel building stands as two triumphant office towers, dominating the skies of downtown Vancouver. The commercial building was designed by Vancouver’s prized visionary architects, the late Arthur Erickson along with Geoffrey Massey in the mid 1960’s.
Known for his affinity for Brutalist architecture, Erickson designed the entire building with concrete, labeling it as the “new marble.” Built originally to house the forestry moguls, Macmillan-Bloedel, the building is distinctive for the peripheral framework and numerous window views. Situated in the hustling downtown core, the office building is close to public transit routes, hotels, restaurants, and Robson Street. Want to work in one of Vancouver’s landmark office towers? Check out the listing at Spacelist.ca
Looking for office space to lease in Vancouver? Why not check out this gem located in the heart of one of Vancouver’s oldest neighbourhoods: 157 Alexander Street in Gastown. This rental space is available immediately and boasts stellar features such as windows all around the office, brand new light fixtures, new hardwood floors, a large boardroom, and if that isn’t enough… you’re located right above The Alibi Room, home to the best beer bar in the city.
Spacious at 2,250 square feet and located conveniently along transit routes, this is an ideal office rental for a bustling company. If you’re interested in claiming this prized piece of commercial real estate to be yours, located in the heart of a creative and cultural hub, call Jeff Toews with Reliance Properties today at (604) 689-1119.
The Spacelist team headed down to the Rio Theatre for a screening of Gary Hustwit’s latest film Urbanized. It was especially nice to have Gary and Gordon Price in attendance for an interactive Q&A post screening.
It’s great to see so many folks out and taking an interest in the city. Urbanized stood out from Gary’s other films which focused more towards autonomous design processes of graphic and industrial design. Of all the design practices, urban design may well be the most complex. It makes for a great film.
Certainly worth watching if you have an interest in space and the city. The film will be hitting iTunes shortly for those who missed it the first time around.
