Real Estate Marketing & Beyond
Technology startups are considering whether or not it’s necessary to return to the office, and for those who think it is, they’re also rethinking what that office should look like.
Maria Gothsch, chief executive of Partnership Fund for New York City, told The Washington Post that many tech startups will decide that they want office space. She said many will decide against moving to a remote workforce on a permanent basis, even though companies like Twitter have already said they plan to do exactly that.
The thing is, the office serves as a place for people in their 20s and 30s to meet people.
“If you are not addressing that desire of that demographic—to give them a place to work—you are potentially impeding your ability to recruit those people,” Gotsch told the Post.
One tech startup that’s already reconsidering its office footprint is MikMak, an e-commerce software company. Its founder and CEO Rachel Tipograph recently broke her 18-month lease on a New York City office building at the height of the COVID-19 pandemic, and is now planning to sign a new lease once a vaccine has become widely available. She said her employees are free to move anywhere in the U.S. however, as the next lease she signs will be something more akin to an event space rather than a traditional office.
“I’m calling it a hub,” Tipograph told The Wall Street Journal. “You’ll do new employee onboarding, big team meetings, maybe fancy client presentations. But you don’t come there 9 to 5 every day to get work done.”
But while startups are re-imagining their offices spaces for the post-pandemic era, other more established companies are lining up more traditional office space in big cities. Facebook for example, recently signed a lease for 730,000 square feet of office space in the Farley Building on Manhattan’s West Side. Meanwhile, Amazon has said it plans to add 900,000 square feet of office space in Dallas, Denver, Detroit, New York City, Phoenix and San Diego.
Still, commercial office landlords are growing concerned, as more than 3 million square feet of office space in Manhattan alone was put up for rent during the third quarter. With so much space available, some landlords are now offering more flexible lease terms to attract companies back.
One such company is Two Trees Management, which operates several buildings in the New York area that house hundreds of startups. Faced with numerous startups that have deserted its offices in recent months, it’s now offering more flexible leases to startups that can be as short as just six months. Previously, its standard leases were offered for a minimum of three years.
