Co-working sites can be useful for start-up tech companies, while others on a growth path find themselves wanting to custom tailor their office environment. But low vacancy rates pose a challenge.
Francis Georgian / PNG files
The technology industry is increasingly an economic driver of Canada’s big cities, and especially Toronto, Vancouver and Montreal. Young tech companies emerge, and in many cases, they take root and expand quicker than their office spaces can accommodate. In other cases, the companies simply fail and disappear.About 90 per cent of tech firms fall into that boom or bust dichotomy, estimates Rakesh Soni, the co-founder and CEO of LoginRadius, which develops and manages online customer identity platforms out of its new head office in Vancouver. The company also has a small branch office in Toronto and several small global satellite offices.Soni recently spoke with Postmedia and shared three tips for Canadian big-city tech firm managers who find themselves on the boom path and in need of a new office space.
Rakesh Soni, the co-founder and CEO of LoginRadius with head offices in downtown Vancouver.
Give yourself plenty of time when searching for a new spaceLoginRadius, which has about 55 of its 65 Canadian staff in Vancouver, relocated in July to a new office space at 815 West Hastings St. in the downtown core.He said the office leasing markets in downtown Vancouver and Toronto continue to be extremely competitive with extremely low vacancy, so expanding or relocating firms should give themselves plenty of time to search.“We looked at around 50 to 55 office spaces before we ended up with this one,” Soni said. “Finding that right spot and going through the lease and terms … requires a longer period of time,” he said.“If I could do it again, I would take six to nine months of planning,” he said.Soni also learned that arranging contractors and getting the appropriate permits for their tenant improvements took longer than they expected, resulting in having to work in the new space while construction carried on.Listen to your workersAt their previous location at Jervis and West Georgia streets, the company was located too far west of the downtown business centre for its — and its staff’s — liking.“We had some challenges in attracting the talent,” Soni said.They needed a larger office to accommodate growth but also wanted a more convenient location. The main feedback from his staff was that they wanted to be near major transit services, dining options and social spaces for after-work hangouts.Many of their younger staffers already faced lengthy commutes from the suburbs, so having an office near the main downtown transit hub helped to ease that challenge. “We wanted to be in the right spot.”Protect your office space flexibilityLoginRadius opted for a single-floor space that is larger than they currently need, Soni said.They figured they would grow into the space over the next two or three years, but for the meantime they carved out a section of the space to sublet to another tenant.“For tech companies, if they can estimate the growth in the future and then accordingly rent a space (and) sublease the space they don’t need, they can optimize their costs,” Soni said.Many firms, like theirs, are venture funded, which means the company can balloon in size in a short period of time — or fold entirely if the funders pull out. “In five years (a tech firm) might be five times bigger,” Soni said.Most landlords aim to negotiate for lengthy leases. Soni said they were able to negotiate down from a 10-year lease to a five-year term. “That was one of the biggest concerns.”They also considered co-working for their Vancouver operations, but felt they needed more control over an environment that served as their global firstname.lastname@example.org/EvanBDugganCLICK HERE to report a typo. Is there more to this story? We’d like to hear from you about this or any other stories you think we should know about. Email email@example.com.