The Boss and the Office
Plus 4 Fundings, 6 Pieces of News, 9 Worthwhile Reads, and a Podcast.
One of the long-held secrets of office location is - “We all work near the boss’s house.”
Said another way, most companies historically have ended up choosing an office that is conspicuously close to the home of the highest ranking executive in that office. (i.e. “near the boss’s house”).
It’s just a variant on the Commuting Principal that focuses on a 20-minute commute for the decision-maker.
Of course, there are exceptions where thoughtful execs will average the commute times of all employers or move into more urban areas to attract younger knowledge workers.
But, if you ask the average office tenant rep broker where 8 out of 10 offices have been located historically, she’ll tell you near the boss’s house.
Fast forward to 2020 and most of us are not in the office regularly and, more importantly, almost all of us are asking ourselves how often we need to be in that office.
Let’s assume there will be some introspection into where the office is located going forward. (Probably a safe bet with all the calls for the “end of the office” cries from Silicon Valley.)
I think the boss’ house is no longer a major factor while everyone in the company is thinking about where the office is located and why.
I know that may seem simple, but I think it might actually have large implications.
We’ll explore more later, but I wanted to touch briefly on this decision process and why it matters.
Because highly-talented, highly-sought-after workers are finding ways to be effective in a remote setting. Most seem to see the value of in-person interactions on a regular basis. And most seem to abhor the idea of hours of commuting after COVID. So office space isn’t going away and distant, rural locations are almost certainly untenable.
The reason that matters is because I think it actually flies in the face of one of the main narratives of COVID-Era real estate.
Namely, pundits seem to have bought into this “everyone is leaving the city” narrative.
Maybe, but I doubt it.
But even if that’s true, what direction are your workers moving? North? South? West?
The answer, if you have any size in your company, is almost certainly “all directions.”
So, then, what’s the most convenient location for all of your employees?
Oh, it’s a suburb because people are leaving the city? Really? Which suburb?
That fancy Northern suburb where the boss lives?
Or that up-and-coming West suburb where some younger families live?
Or is is that Southern suburb where your oldest employees have lived for 50 years?
See the problem here?
It’s the geometry of circles.
I can tell you with geometrical certainty around the measurement of circles, the most convenient location for your office is the middle of the circle. In this case, if a city has concentric circles of population and your workers are evenly distributed in all directions, the middle of the city is most convenient.
For sure.
Regardless of anyone’s political, social, or health opinion, it’s simple geometry.
So, if it is no longer sufficient for the office to be only convenient for the boss, and the post-COVID office needs to be most convenient for most people, and your employees live in all directions from a city center, you’re going to be in the city center (or close to it.)
So before we go and declare urban centers dead or dying and think that office space is sure to collapse in city centers, ask a few talented young workers (i.e the future of your company) where they prefer to commute to after they feel safe to come back into the office.
In fact, do it for your entire company (just use SurveyMonkey and make it easy), average the answers, and tell me I’m wrong.
Then I’ll see you at the Starbucks in the financial district on your way into the office in 2021!
On to this week’s deals and data:
Fundings:
Density, an occupancy analytics startup in SF, raised $51M from Kleiner Perkins and others.
Open Space Labs, a SF-based photo documentation startup for construction, raised a $15.9M Series B led by Menlo Ventures and a slew of PropTech funds.
Aquicore, a DC-based building management startup, raised $14M led by Keyframe Capital.
Buildout, a Chicago-based CRM for CRE, received some amount of capital Riverside Company.
Funds:
Paid Subscribers Only.
News:
HUGE shoutout to our friends at PropTech Acquisition for the Porch deal. Tom and Joe were in the SPAC game before it was cool!
AirBnB is becoming less reliant on Google. Someone sell me shares in AirBnB!
Looks like Knotel is getting a hair cut.
Not sure this is “new” per se, but WeWork has refocused on corporate tenants.
Worthwhile Reads:
Franco at Propmodo has a nice article on how Office Buildings can Accommodate the New Way We Work.
The WSJ reports that remote working is starting to show its cracks and GlobeSt makes the case against going fully remote.
Commercial Observer has a nice Q&A with our friends at OpenPath.
Global Finance weighs in on real estate after COVID.
What buildings will look like post-pandemic, according to the WSJ.
Why hotels have struggled to offer a contactless experience.
Interesting piece on PropTech and the future of retail leasing.
Check out Goodwin’s latest on the future of CRE with their piece on Life Science and Healthcare Facilities.
Watch:
Nexus does an interview with 75F founder Deepinder Singh.
One Final Thing:
If you play in the B2B space and like marketplaces, you need to read Lenny Rachistky’s posts. He’s a former product guy at AirBnB and writes deeply on the topic of marketplace building. Check out this illustration from this week:
Thanks for reading!
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