One of the most irritating obstacles encountered by growing startups is the hunt for affordable office space. Startups with a dozen employees generally aren’t interested in leasing vast tracts of space, which makes them unattractive clients for business realtors, so they’re typically left to fend for themselves.
Rofo, a new startup founded by two former commercial real estate brokers, is trying to offer small companies a solution. The site recently launched in public beta, and specializes in offering real estate listings for offices up to 5,000 sq feet. For the time being listings are restricted to the Bay Area, but the company hopes to expand to other regions in the near future.
Rofo (which stands for “Right of First Offer“) sports a basic but intuitive interface that allows users to specify the size of their desired office using sliders. Users can tag suitable candidates with the “shortlist” option, and each listing is plotted and pictured using integration with Google Maps and Microsoft Virtual Earth.
To generate its listings, the site crawls a number of partner commercial real estate sites for open office inventory, and also monitors XML feed from brokerage firms and larger landlords. Users can also create a traditional direct listing, similar to those seen on Craigslist (but hopefully with less spam).
CEO Alan Bernier acknowledges that there are some strong competitors in this space, including Loopnet, but points out that many of these require a fee to post or view listings. Conversely, Rofo is free for both brokers and browsers. As with other realty sites, Rofo’s success will lie in its ability to collect useful and current listings. Bernier says that the site currently has about 80% of the Bay Area market covered, but that number will be hard to maintain as the site expands to new areas.
I just visited the Rofo office for an upcoming post and had a nice visit with the team. Glad to see them featured on Techcrunch!
its about time some tasteless site ideas appear.. this very much reminds me of not so or meh successful job sites.. like healthjobs etc.. Just dont see much point in this when best listings are still going to be on craigslist etc and free
also i d like to add that this looks like a mod of jobberbase hmmm
I am a Commercial Real Estate Agent in San Francisco, and I represent only tenants here in the City. I also focus a lot of my efforts helping startup tech companies with no experience leasing office space.
As I tell all of my clients right up front, I hold no secrets. If you want to, and have the time, every space is listed somewhere online. Never hire an agent that claims to know secrets. It is all about finding someone you trust, with great customer service, who truly will look to protect you on all of the various ways to get burned. Also, having someone to leverage multiple opportunities into the best rental rate on a specific building saves real dollars, lots of them.
I have used rofo and others, and I advise my clients to do the same. But I always tell them to let me handle the actual conversations with a landlord because there are way too many factors that take experience to be ready for. Plus, tenant reps don’t cost anything, its like hiring an expert programmer who knows all the tricks to save you dollars, but not having to pay them.
The analogy I like to use is that of a mechanic. If you want to get a little dirty and do an easy job yourself, like changing your oil, then go ahead, proabably the right call. But if you have a real engine problem, you would be crazy to visit wikipedia and try it yourself. More likely you would hire a professional you trust, especially if he offered to do the job for free.
Tom
Great site! I started Instagarage.com out of a Fema Trailer in New Orleans and now working from a Fema Assisted Living home.
Thank God for Techcrunch and Rofo.com
LOL!!!
Haha wow… my partner and I were just looking at Craigslist to get an idea on how much office spaces cost in the Bay Area. Now we have a great tool to use for that instead! Great timing
Ray, I would be happy to run a search for you as well to help you cover all the bases. No charge to you, and no pressure to retain my services. If interested shoot me an email. As I said before I think Rofo is actually helpful to me, it gives my clients a way to make sure I am doing my job. I hope they are successful.
Tom Poser
tom.poser@am.jll.com
@ Tom Poser
Amen. Very well said. I always laugh when a moron believes s/he will save a buck or two by finding + negotiating a site. Fact of the matter is that yes I think that many people will locate a number of places for their start up, but, negotiating terms of the lease is silly. The founders time is best served adding value to their venture not attempting to figure out what a triple net lease is.
My favorite stories are when engineer geeks try to negotiate. In the end the business person always wins…
So if you are working from a garage(no funding), how much should you be earning before you can afford to get office space?
It depends on your objectives. Normally you base your rent as a percentage of your budget, with different industries having different standards. But if you need space to create an impression, then it is more vital to get bigger quicker. Plus, a lot of startups grab space efore they are profitable because they are funded and have started hiring. Luckily right now there are a lot of plug and play sublease spaces on the market that come cheaper than direct space.
Tom Poser
http://www.sanfranciscotenantrep.com
Tom: the problem is you have a conflict of interest since you take a percentage of the deal. You have an incentive to get a bad deal done for the cleint.
By the way you’re positioning yourself through these services, you should charge like a lawyer/mechanic and charge hourly, or charge a flat fee.
True and not true Adrian, but you bring up an issue I constantly have to deal with. Almost every building in the SF commercial real estate world is represented by agents, and those agents have contracts with the ownership groups. 90% of the time they have a preset amount of commission they are contracted to receive, and I get a % of that preset amount. Whether the tenant is represented or not, the landlord will pay the same fee. In my written agreement with my clients however I do make sure it is clear that ultimately that fee is generated by the value of the stream of payments they will pay over time.
That being said, could I screw my clients by negotiating poorly so I get a bigger fee? Of course. But for starters I am honest guy with a wife and kid and great references. More importantly, that would be short term thinking. The hardest part of my job is getting clients, why would I risk losing long term clients that will introduce me to other clients just so I can make 5-10% more on a single transaction? People that do that get run out fast.
Like I said before, you have to find someone you trust and check their references. My point is that you should hire someone, if not me, another agent that will look out for you.
if you paid a brokers by the hour, your deal would never get done. the best solution is to ask the right questions before you hire a broker.
Well if anyone is looking there are desks to be had at 555 Post Street in the City
Oh and as always Pier 38!
I use BuildingSearch.com. They have been at it far longer, and have far more listings. Plus it’s free and easy to pull up buildings by address. This market is saturated with websites with good content, but this content grows stale and unless you can stay on it, the content cannot be trusted. Brokers do not update listings much…
Great Idea, who would thought of doing this helpful site.
Nat
http://www.workersinc.com
Tom - shameless!! you are a poser
Dan: Disappointed in your choice of places to toss out an insult… more disappointed in your lack of originality. That one lost steam in 6th grade.
Is it recurring in your professional life? I’m just curious as I’m working on a web 2.0 startup about comedic names. I think your story can secure me funding.
@Jason I think Rofo’s success actually will lay in their ability to make money from the free service they are offering. How do they plan on doing that?
Let me preface this post by saying that I know office space.
What I can tell you is that nobody will be able to show you 100% of the market. A good broker can get close though.
The second thing is that while sites like ROFO might help you find the space, that is the easy part. The part tenants need to be worried about is structuring and negotiating the lease. Termination rights, expansion rights, alterations, security deposits, sublease rights, rent concessions, default, limiting operating expense exposure, dealing with casualty, restoration, so on and so forth.
There is no substitution for a competent broker and a competent real estate attorney for the second part of the “office space equation”. A good broker will help you determine how much space you need, how long of a term to seek, and be out there working on your behalf to get a good deal.
My advice? Find a good broker who doesn’t have ties to the landlord, and stick with him. In fact, if he’s good, he’ll check ROFO for you just to make sure he’s not missing any opportunities to present to you.
This could be a hit in California, the internet capital!
http://blabtech.blogspot.com
It seems like the smaller you are the harder it is to get office space, lets hope this service will really help the start ups.
Part of the problem is few office spaces or owners have a “product” that will work for start ups. The ideal space has a short lease term and the tenant will pay up front for all TI work. That way the landlord does not need a big commitment and personal guarantee. Just collection all the available spaces does not mean the Landlord will take the tenant who likes the space. This is a small niche from a real estate point of view. If there is a market why are the Rofo guys not building a product to meet it?
Rofo doesn’t support Dallas. Very typical of these little startups and no ambition to support main cities outside of San Fran and NYC.
LAH
This guys are calling it a Beta service with only supporting the Bay Area. What a joke!!! Whoever you are… At least build up a real DB and then launch it or call it a Beta!
@ Don Wilson. Forget about Dallas or NYC, these guys don’t even support markets like Los Angeles.
We need this in Washington DC. If/when you launch here, contact me and I’ll pimp it to the startup community. It would be very valuable to have this insight here!
Peter
As someone that offers small spaces Rofo is a great tool. I have used Rofo to create a listing for the spaces that are available in my building and because they have created a way to embed a Rofo listing into craigslist I can manage my listing on Rofo and then integrate easily into craigslist by just copy and pasting the code into craigslist. This also gives you more pictures and quick access for potential clients to more information about your property listing.
http://sfbay.craigslist.org/sby/off/782576688.html
For those complaining about Rofo only being in the bay area right now, I am confidant they will be rolling out into new markets as they refine the products. Most successful start ups begin with a small beta and ramp up, I look forward to seeing what markets they expand into when they do.
These folks called me and I listed a property that is ideal for startups. No replies or leads. Plus no follow up from ROFO to see how I like their service. As both a small business owner and a commercial agent I’m not sure of the value to either. Nice interface though.