Start Ups are Starting Up All Over

 There are three primary motivations fueling the current boom in start ups.  One is that many people have left, by choice or otherwise, their employment elsewhere, and are following their dreams into their own businesses.  The second is the availability of cheap capital, with banks looking for loans, The third is the real wild card, because most of us can't remember an earlier pandemic.  The health crisis over COVID is spurring entrepreneurs to look for solutions to new problems, or to fulfill needs that aren't being met currently, such as with PPE.  

These three reasons have combined to make this year, despite all of its terrible downsides, a fertile one for new ventures.  There has never been a greater need for people to look outside the box for answers, and smart businesspeople everywhere are capitalizing on that need.  It usually also means that those same risk takers will also think differently about commercial real estate.

In the recent past, we've seen other trends, such as the repurposing of old industrial buildings and schools for residential or commercial use, or the rise of "green" as the ultimate amenity.  To court millennials, landlords have developed more open space, more areas for socializing and recreation, and paired food and drink with workplaces.  One residential landlord told me recently that he has a dog washing station at his newest project, a nod to the proclivity of millennials to have pets in urban areas.  

What will the COVID crisis bring us in innovative trends?  Maybe shared space that's shared by day, by time of day, or even by season.  Perhaps there will be more and better use of stairwells, to cut down on elevators, and probably different eating options (more picnic areas outside, fewer cafeterias).  Outside heaters and fire pits will definitely feature in chic workplaces.  Cleaning processes will become big factors in rental choices. 

What should landlords do?  Maybe begin by thinking more favorably about start ups, looking more at the people involved, and less at the company history.  Be more willing to consider drastic or unusual changes in floor pattern or layout.  What about putting the gym next to a garage door of a sort, where a whole wall opens to the outside?  Or a year-round pool, heated with geothermal energy?  It may be that shorter leases with more options for extra space or an early exit are entertained. 

If this year has taught us anything, it's that no one knows what the future will bring.  Remember that fortune favors the brave!