Thank You CBRE – Kevin Anderson, John Lorence, John Nigon & Tad Jellison.
What is CBRE?
CBRE is a global commercial real estate company. Our team leads the “tenant representation” practice in the Twin-Cities meaning we work with companies to help find, negotiate and structure tenant- favorable leases on their office space. Our team does not represent landlords, only tenants, meaning we have no vested interests other than showing a company what works for them.
Who are your notable clients?
Code 42, JAMF, Leadpages, Fieldnation, Sportradar, When I Work, Aeritae, HighJump, Concur, Peoplenet, infor, Kroll Ontrack, FrontEnd Masters, etc.
What is CBRE’s advantage?
Our track record, resources and commitment to deliver results. We’ve been fortunate to work with such a dynamic list of companies but as the largest commercial real estate company in the world, we have access to far more information and resources than any other firm, directly benefiting our clients. We only have one or two advisors running point on a transaction at one time so we form strong relationships with our clients, but our team is able to leverage our vast resources sitting side-car.
It allows us to know where vacancies are before they’re on the market, having our project management team within CBRE oversee build-out so it stays on-budget and on-time, have our incentives team within CBRE uncover cash grants from the state for growing companies adding jobs, etc. There are many things that go above-and- beyond just transactional work that clients can’t find elsewhere.
What is the relationship between real estate and tech?
So much of tech is attracting and retaining talented employees. Having a “cool office” with amenities in or nearby the building is what employees are looking for and it’s a tool many of our clients use to recruit.
There’s also no crystal ball for tech companies. Within months they could blow their hiring projections out of the water or go back to their garage. There needs to be a strategy in place that allows for company’s real estate to be flexible during ebbs and flows of business cycles. That’s where a lot of our value comes into play.
How early will you begin working with start-up companies?
The earlier the better. We prefer building relationships with entrepreneurs and businesses early-on and acting as an advisor before they even have office space. We spec a lot of time to helping early companies because real estate is a vital part of their business and we never want real estate hindering a company’s growth. Most companies won’t need a real office space until post Series A, but there are definitely exceptions.
How much does it cost to use CBRE?
Nothing. We compare our compensation most closely to a buyer’s agent in residential real estate. In each transaction, there is a fee (typically a percentage of the rent) that is baked into the deal that the landlord keeps if a tenant is not represented by a tenant broker. If the tenant is represented, the landlord (or landlord’s broker) splits the fee with the tenant’s broker no matter what building the tenant goes to. Not having a real estate professional on your side is like paying someone double to negotiate against you. Do you use an attorney? Yes. Do you use a CPA? Yes. Then use a commercial real estate advisor.
What are some terms you negotiate for companies?
Anything that you would ever see in a lease. Base rent, capped operating expenses, Right of First Refusal, Termination Options, Expansion Rights, Free Rent, Tenant Improvement Allowances, Renewal Options, Right of First Offer, etc.
For startups and tech companies, flexibility and budget is key. We always make sure to have an “out” for a company in their lease so they are not forced to finish their lease term if their business changes. Many times, we’ll negotiate a termination option in the event they are acquired (even partially), increase/decrease revenue or headcount “X” amount or terminate on a set date by paying unamortized tenant improvement costs instead of being left with years of lease term left.
How many SF per employee should a tech company project?
150 SF – 175 SF per employee for most companies is a safe bet. This includes room for both internal hallways and communal space such as conference rooms/kitchen/breakout rooms.
What are the “hot” areas in Minneapolis for tech?
The obvious answer is the North Loop. There’s something about the brick & timber buildings that screams tech and startup. However, a lot of landlords in the CBD (central business district) are seeing the growth of the local tech scene and beginning to sharpen their pencils in order to attract companies to their buildings. We saw 100 Washington take a bet on tech, completely renovating the building and our clients Code 42 and JAMF jumped on the opportunity that otherwise wouldn’t have been in
question. 5 th Street Towers is doing a similar renovation and adding common amenities for tech companies to collaborate and have their employees enjoy. We’re also seeing West End, NorthEast and Midway becoming some hubs for tech companies.