Tech Startups Reimagine Future Needs for Office Space
November 2, 2020
Tech startups are known for their open office layouts. But as a result of the pandemic, they’re rethinking whether to return to the office—and what it should look like if they do.
Many tech startups will want new office space, Maria Gotsch, chief executive of business group Partnership Fund for New York City, told The Washington Post. Gotsch doesn’t believe these companies will move to an all-remote workforce, which some have already announced they plan to do. Workers in their 20s and 30s rely on offices as a way to meet people, she says. “If you are not addressing that desire of that demographic—to give them a place to work—you are potentially impeding your ability to recruit those people,” Gotsch told the Post.
MikMak, an e-commerce software company, is one tech startup that is rethinking its office footprint. MikMak founder and CEO Rachel Tipograph broke her 18-month lease on a New York office during the COVID-19 outbreak and plans to sign a new lease once a vaccine is widely available. Her employees are free to move anywhere in the U.S. The next lease she signs will likely be more of an event space and less of a traditional office.
“I’m calling it a hub,” Tipograph told The Wall Street Journal. “You’ll do new employee onboarding, big team meetings, maybe fancy client presentations. But you don’t come there 9 to 5 every day to get work done.”
While some tech startups are reimagining their office spaces for post-pandemic, some larger companies are doubling down on office space in big cities. For example, in August, Facebook signed a lease for a 730,000-square-foot space at the Farley Building on Manhattan’s West Side. Also in August, Amazon announced it was adding 900,000 square feet of office space in New York, Phoenix, San Diego, Denver, Detroit, and Dallas. (Read more: Amazon Defies Trend by Increasing Physical Office Footprint.)
But with more than 3 million square feet of office space in Manhattan alone put up for sublet in the third quarter, landlords are growing concerned. They’re starting to offer more flexible lease terms to attract more companies back. For example, Two Trees Management, which houses hundreds of startups across several buildings in the New York area, is offering greater flexibility in its lease terms to try to retain and attract new tenants. Two Trees executives say it started offering leases as short as one year or six months to attract startups. Before the pandemic, its standard leases were for three years.
“Tech Startups Rethink Office Space,” The Wall Street Journal (Nov. 2, 2020) [Log-in required.]
Updated: November 25, 2020