Fueling the technology behind corporate real estate
Corporate real estate is a very complex industry. From a company perspective, leasing out office space can be a big challenge. The same, if not even more so, is true for those seeking out office space to rent. As the price of real estate continues to rise in major North American cities, it would seem necessary to create a technology to address these challenges.
So that’s exactly what Jonathan Wasserstrum, CEO and Co-Founder of SquareFoot, did back in 2011. The New York-based company offers an online marketplace that connects businesses with vacant office spaces and calculates how much actual space they need. We caught up with Wasserstrum to talk about his success in the industry and how technology is changing corporate real estate for the better.
How did you develop the concept behind SquareFoot and why did you feel like there was a need for it in the current market?
Wasserstrum: Most of my professional background has been in commercial real estate. I moved to New York originally for business school, but later did an MBA in entrepreneurship and real estate at Columbia University. After school started, I got a call from a friend of mine who was looking for a new office space. He assumed he could find an office space online, but couldn't.
We realized there were a bunch of pain points that businesses had with regard to finding, transacting, and occupying commercial real estate. We set out to build SquareFoot to solve those issues. A lot of the pain points that clients have are the same for everybody. People want to be able to see inventory. They want to see transactions. More often than not, we’re also starting to see a growing demand for flexibility.
The variety of solutions that we build and provide are the same. The nice thing for us is that we don’t have to decide whether a company is “worth our time.” We very happily do deals for 2,000 square-foot companies with a staff of 15 and companies that are ten times that size. For us, it’s about what the client needs and the types of things they need actually don’t change as you go from two to 200.
In terms of your personal philosophy as a CEO, Business Insider quoted you about the importance of sitting in the middle of an office space. Why is that something you actively practice?
Wasserstrum: I hope things that are near and dear to me and my leadership team’s hearts cascade down into all parts of our organization—both internally and externally. Things like transparency and openness are very important to us. We like to run a very transparent process when we work with our clients; it helps us build trust. We do the same thing when it comes to how we run our organization.
Transparency builds trust and it helps people share ideas. While we have a lot of great ideas that come from our proverbial C-Suite, we also have a whole lot of good ideas that come from outside of the C-Suite too. We’re far better as an organization when we foster that openness where everyone within the company can share their great ideas.
Speaking of great ideas, SquareFoot recently acquired PivotDesk. This marketplace connects people who need office space with those that have extra space. Do you find that unused office space is a problem many companies face as well?
Wasserstrum: Yes, and the stats that I’ve heard, seen, and witnessed first-hand support this. Somewhere between 5-20% of company office space is unused—and that’s by design. When a company signs a ten-year lease, for example, they need to make sure that they can fit into that space in year seven the same as they did in year two. It’s essentially built-in unused space.
Our subsidiary, PivotDesk, enables you as a host with extra desks to have another company come in and share your office space with you. Is that coworking? Technically, but not how we traditionally think about it with a big pool of desks and a bunch of random companies sitting next to you.
Before we took over PivotDesk, they were more focused on the tech world. We actually found that there’s a pretty massive opportunity to utilize unused office space in the broader corporate world as well.
A lot companies in competitive corporate real estate markets such as New York City or Los Angeles may have difficulty finding a space that matches their needs and budget. What’s something that might surprise these companies about the inventory?
Wasserstrum: I think companies are often surprised by two things that are actually opposite to each other: how much everything looks alike and how much variety there is. There’s a lot of inventory that winds up looking very cookie cutter, which works for the majority of people.
There’s also all these little random things which either work really well or not well at all. Sometimes you have companies that come in and spend a lot of money on a particular buildout that is made very custom. That obviously works very well for them, but probably not so much for the next company occupying the space. It can become even more problematic as overall styles and trends change in the industry.
I was talking to one of our brokers the other day who was working with a client in the retail sector and their space was built out ten years ago. It was built as a corporate HQ and now geographically in the middle of where everybody else wants to be. But it’s designed like a corporate HQ and much different from the look and feel of other companies that would otherwise want this space.
When you look to the future of commercial leasing, do you think that technology is going to continue revolutionizing the marketplace and how companies find their new office spaces?
Wasserstrum: I get really on-edge when we talk about “disruption” or “revolution.” I think they’re a bit trite as words. I know what’s happening and what will continue to happen is a whole bunch of little evolutions that five to ten years from now will have amounted to a full-scale revolution.
There won’t be a seismic shift overnight. The industry just doesn’t move that quickly for a bunch of good reasons. There’s no magic switch that gets hit from a tech perspective and suddenly the world changes. With that being said, tech makes everything better. It makes search processes more transparent. It makes the transaction process more enjoyable and efficient. Technology makes everything better, but it doesn’t fix all yesterday’s problems today.
Visit SquareFoot to find commercial real estate and office spaces for rent. For shared office space solutions, head over to PivotDesk.
Have you or your company ever struggled to find the perfect office space? Join the conversation and leave us a comment below.
Photos: Essow Kelelina, Rawpixel, Mwabonje, Rawpixel