Jot Thought

Esomnie’s growing like gangbusters. We need to start hiring full time developers, which means we really need to find office space.

Now, I haven’t looked for office space or negotiated a commercial lease since my first job out of college. So, lots of homework to do. Right off the bat, lots of time on Google, looking for advice. I posted a request for advice in a couple of Yahoo Groups for ex-Intuit and ex-eGroup folks. I also reconnected with an old buddy, Jade Dauser, who does this for a living and is quite good at it. So, fairly well armed with my refreshed knowledge (note I say knowledge, not wisdom,) I began looking for space. Let the fun begin.

My favorite location (sarcasm noted) was the one where the entire floor vibrated from the furnace underneath. Not just one room, either - the whole place. For that “mild inconvenience,” the rate had been reduced to only $1.50/sq. ft. Think our developers would appreciate the savings as they bounced at their computers for 8-10 hours a day?

There was also the space near downtown Sunnyvale that, while large enough for 6-10 people, had one allocated parking space. With frontage on a major road (Mathilda) and one small side street (full of cars from local apartments,) it gave me visions of parking in North Beach on a Saturday night. Pass.

After looking at several more places, we found one that was extremely promising. Very close to the train station, high quality, shared conference room, shared kitchen, ability to grow into more spaces. Seemed like a no-brainer. Ah, but this is the west, and the world of commercial space is nice and wild. We were looking at a new space the landlord was going to build out. More square footage than 2 offices (which he rents out individually), plus we were willing to keep it all open (fewer walls and windows to build.) In addition, we’d sign a one year lease so he’d be guaranteed to get enough revenue to pay for the build out of an ongoing asset. The price? More money per square foot than the smaller offices. I’m still having trouble with that one.

On to the next space. We find another promising one, again close to the train station. This time it’s the front downstairs of an office condo. Great space, wide open, and the landlord is willing to provide a good deal on the rent. Only one problem - because we’re a new company (5 months old,) he wants a personal guarantee. We say we’re happy to guarantee the rent payments. Not enough - he wants us to sign as individual and severable tenants. Well, there goes all the protection we have from our LLC. Sorry, can’t sign this lease either - thanks for playing.

Where do we net out? We just signed a month to month lease with a second-tier building. The cost is about 2/3 what we were going to have to pay at the other places, it’s month-to-month, has lots of space to grow, all utilities are included (even T1 internet) and they don’t even require that you name them as insured on your liability policy. Based on our experiences to date, I’m waiting for the other shoe to drop. But for now, we appear to have a place to build a company.