California Office Real Estate

When you don’t really need an office, but you kind of do.

On March 12, 2020, I was on a flight to San Francisco when President Trump announced sweeping travel restrictions for travelers from European countries. On March 16, 2020, San Francisco’s Mayor’s Office announced a shelter-in-place order, which would become State-wide soon after it would take effect in seven San Francisco Bay Area counties. I remember the week before as the last week I had a normal office experience. I remember that particular week as a change that could not be undone and forever change the way I work.

When I started Cedar Bay Group two years later, I knew I wouldn’t want an office. The commute is a waste of time. The cost of office space in the Bay Area outweighs the benefits and gains from its utility. And, I knew, I run my startup as lean as I possibly can with minimal staff and maximum flexibility. Eventually, my legal team advised me to find some form of office space that is not my home to build a better case with the Government. Reluctantly, I started looking for suitable office space. As the Cedar Bay Group is based in San Francisco, I started looking for available commercial real estate within the Sunset District where I live. For example, Loopnet surfaced this space at $55 per square foot. That comes out to about $3,200 per month or $39,000 per year. I verified pricing across other websites. The site Officespace was useless.

Making a contractual commitment over a longer term ought to be thought through. In my case, it didn’t make sense to rent office space at these rates, when the majority of the business only requires an internet connection and a laptop. Therefore, a flexible office space seemed more appealing. Now, comparing prices is the minimum effort required for a sound financial investment, but when it comes to co-working spaces with term flexibility DeskpassIndustrious, or Codi all could not compare with WeWork. WeWork’s sales team was quick to offer us a flexible contract that could be executed annually at a discount of about 30% or we could rent it month-to-month with a smaller discount. The WeWork All Access turned out to be a perfect solution for the stage my company is at. It allows us to bring in the entire team if we need to. As diligent as the sales team conducted its business, the billing team wasn’t as smooth and customer-oriented. It took us several emails to obtain invoices with adjusted prices. For some reason, WeWork’s ticketing system kept on closing the request. It wasn’t a good experience, but certainly acceptable considering the deal we struck.

This post originated on my substack Codifying Chaos.

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