[tmwatson100]

Hi roel_v,

In our experience we have found that there ARE spaces available for companies such as Chris' that have little idea of where they will be in 6 months time. At the end of the day, startups and becoming more and more commonplace and the demand for space with contract flexibility is going up with it. It is up to landlords and operators of space to decide how they react to this. They can either ignore it, leave the space open until their find their 5 yr client. Or they can attach a slight premium to the space and rent it for a more flexible term.

In general, we have found that space operators and landlords and increasingly accommodating for this and are attaching a risk premium. It may not be as high as 40% but there is something there. They achieve this by paying rent on a sq ft basis, but letting out the space on a per desk basis. If you do the maths, you can achieve a relatively attractive spread assuming x% occupancy.

We believe that Spacious can help liquidity in the market by making landlords and space operators confident that if they react to shorter contract lengths, they won't have to worry about long periods of vacancy as a potential tenant would be able to find them easily.

[roel_v]

Sure, as a 'co-working' concept, it exists. So maybe the GP was referring to that, but then again (while I don't know the specific market in London), there is plenty of supply in that market in every big Western city I know a bit about, so I assume the same for London. Then again you pay 100% premium on those spaces.

What I was reacting to is what I hear relatively often - 'hey my house/room rent is X / m2, why can't I find an office for that price? It's just me and my buddy and we're broke and most likely out of business in 6 months, why don't landlords love us?'.

"We believe that Spacious can help liquidity in the market by making landlords and space operators confident that if they react to shorter contract lengths, they won't have to worry about long periods of vacancy as a potential tenant would be able to find them easily."

It's not clear to me what you're doing any more, since you seem to contradict yourself. Are you about making landlords turn themselves into coworking spaces, or do you have some way to guaranteeing a higher occupancy rate for owners, or are you just Craigslist for office space, like there are a zillion others? What's your added value? The coworking space is so crowded, I don't see any savvy owners who are not in dire straits dive into that market any more in 2014. There is vast oversupply (at least at price levels that make it profitable) in the (admittedly small, niche and out of the way) markets I know about. Those who tried it find out very soon that the small hidden costs add up very quickly, and that it's a completely different kind of business from 'just' renting out property (and a business most don't want to be in).

[tmwatson100]

"What I was reacting to is what I hear relatively often - 'hey my house/room rent is X / m2, why can't I find an office for that price? It's just me and my buddy and we're broke and most likely out of business in 6 months, why don't landlords love us?'." - absolutely, I agree completely with you on that. If you can't afford it, you can't afford it.

We're not at all about making landlords turn themselves into co-working spaces.

We want to make renting office space easy.

At it's most basic distillation this means "search and transact" - matching supply and demand as best as possible. We believe this is broken due to assumed knowledge, market fragmentation and asymmetric information as mentioned in the blog post itself.

This not only improves the experience for companies looking for space, but allows those who own space to be discovered a a lot quicker. The very fact that zillions of craigslist clones already exist goes to show that this problem just has not been solved yet.

What we mean by Spacious helping liquidity is a derivative of search and matching supply with demand. If you are confident that you will be able to find a tenant quickly because there is a platform that exists to effectively match supply and demand, then you may have slightly less hesitancy in letting out your space to someone for <1yr.

Of course, I absolutely agree that common sense, and a typical risk / reward scenario means that you will always want to lock in a tenant for as long a lease as possible. This tenant would ideally have great covenants and >5yrs of financial history.

The point I was referring to in my initial response was to the no. of companies now springing up that need <1yr leases because of uncertainty and how a space owner may benefit from that... whether this is from co-working or subletting if you are already a tenant.

Your insight is very much appreciated and I really do enjoy discussion around this!

[roel_v]

But then what value are you adding over Craigslist? You are basically a list of offices for rent, and owners put their space on your website, and maybe you crawl other sites to seed your offerings, too?

In most areas there are sites that are set up by real estate brokers. Their agents or licencees or franchisers or whatever input all properties in their central system and they all end up on that brokers website, and submitted to big sites as well. Is your schtick to squeeze out this middle man? To offer a platform to people who don't use agents? If so, how are you making money? Do people pay to list their properties, or do people finding properties pay you?

Look, not to be shitty about it, but you said e.g. this:

"We believe that Spacious can help liquidity in the market by making landlords and space operators confident that if they react to shorter contract lengths, they won't have to worry about long periods of vacancy as a potential tenant would be able to find them easily."

I see no other way to interpret this is 'we list your properties on our website so don't worry about losing 3-4-5 months of rent on a short term contract because we can find another one like that very fast'. Actually I didn't understand it like that at all when I had only read the OP, but the more you explain, the more I get the feeling this is it. What makes your site find tenants faster than other sites?