A startup I am helping out is getting ready to lease their first office in San Francisco’s SOMA area. Here is the advice I sent them:
Ask for a buildout/improvement budget from the landlord. If you are committing to spend over one hundred thousand over 2 years, they can probably sport you $3-5k in improvements (they will likely want “ok” power over the improvements you want to make). Typically the types of things you might use that money for are:
- Security – alarms, cameras, locks, keyless entry, etc
- Lighting and flooring
- basic structural (make a conference room, for example.
- Basic kitchen, if there is nothing there
- Improve/cleanup bathrooms, add a shower, perhaps.
- HVAC upgrade or installation
- Ethernet wiring and electrical additions/upgrades
As you are only there for 2 years, you won’t want to spend too much of your own money on this, but nothing makes office worse than a crappy bathroom, etc. Other things to know:
- Rules around sub-letting? You will likely outgrow the space before the end of the lease
- Rules for extending your lease in 2 years, if you choose to. You want right of first refusal, so the space is not taken from you, if you want to keep it.
- Ask if the landlord will pay for your relocation costs from office to office. Doesn’t hurt to ask.
- Any rules about food on location? What about pets? Are you allowed to bring dogs into the building?
- Parking, parking, parking. You need to find at least one spot very close so you can bring in things like food, furniture, etc. Tell the landlord to give you at least one spot in that parking lot attached to the building.
- Temperature control. The place needs to be able to keep temperatures down (heavy concentration of PCs and Servers will heat that place up. Also, you want it to have a heater for the cold months (Dec-Feb).
- Who owns the building? Do they have any other internet tenants in the city? Just curious as a bad landlord can make your life hell.
- What about electrical outlets? And power to the suite? If they haven’t upgraded power, you may not be able to power the 100+ PCs you will end up having. Ask for some info on that. They should know how big the box is for the space.
- Who was the previous tenant?
Then my fellow advisor Jason Devitt added these thoughts:
Turn it around and think about the terms you would propose to those subletting: six-month minimums and month-to-month after that, 30 days notice to quit, they have to secure their own bandwidth or your traffic has priority etc. It may be one big happy Y Combinator family now, but things can go wrong.
Assume nothing. I did not expect any problems with connectivity in this part of the world, but DSL to our building is unreliable (we are too far from the nearest repeater), no MSO has run cable to the building, and when Covad came to install our T1 they could only find one free copper pair and the wires were in such bad condition that they told us we may not get more than a year out of them.
Do you actually have a hiring plan for the next 6-9 months?
Parking, parking, parking yes, but don’t forget bikes. Is there somewhere safe to lock those?
A shower may seem like an extravagance, but we had one in our last office and a lot more people biked to work as a result.
Get your lawyer involved, don’t negotiate a lease by yourselves.
I also found this site with some good resources.
