I’ve heard several startup CEO’s say that commercial real estate brokers and building owners don’t understand a startup’s needs for office space. I’ve also heard brokers and owners say that startups are unrealistic about their expectation concerning what an owner should be willing to do for a startup and its office space. It is a struggle that has gone on for a while now, and being both a broker and a CEO of a tech startup. I understand both sides, and I don’t have a good answer as to how you resolve the struggle. However, something has happen for the first time that I know of, at least here in Atlanta, where a tech CEO has purchased a 5 story office building for the sole purpose to set up an ownership structure that favors the startups. Will this disruptive CRE? Will other building owners follow suit? Will it be successful? Where is the unicorn of a building?
Actually right next door to a building that my wife leasing out. The building is called Ivy Place, and here is the article announcing Atlanta Tech Rock Star, David Cummings, has purchased it. I’m extremely excited to see how this works out for David. As I mentioned before there has always been a struggle between building owners and startups. David is going to change that here in Atlanta, but will this work because of the model that he is going to setup? Which is charging per head vs. per RSF. Or does it work simply because companies want to be associated with David Cummings? I do believe that having an environment where startups can collaborative is beneficial and has worked well in the past. However, it has always been on a small scale for office space or in University sponsored incubators like ATDC here in Atlanta. If it works on a big scale, say an entire building, will other commercial real estate owners follow suit. Say a Kyle Jenks of Parkside Partners here is Atlanta. Kyle is known for purchasing old warehouses and turning them into funky loft space. Could he purchase a 50,000 – 100,000 RSF warehouse and turn it into a place for startups like David is doing for Ivy Place?
I know that these are a lot of questions with no answers, and I don’t have the answers either. What I can tell you is that I believe that Atlanta Tech Village will be successful. However, I think it is going to be hard to know if it is successful because of David Cummings and who he is, or the new model that he is setting up. At any rate, I’m looking forward to seeing the environment Atlanta Tech Village creates and hopefully being a part of the that culture in the future.