

Tech entrepreneurs rally to save their hangout - landist
http://www.oregonlive.com/business/index.ssf/2009/05/tech_entrepreneurs_rally_to_sa.html

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pj
Sounds like the startup that is running the office space could use some
lessons from lean startups themselves.

Who signs a 15 year lease at $12,000 without knowing they can afford it?
That's exhorbitant and I am sure that they could find less space for less
money and build the business slowly.

This business, probably should go out of business. Let a smarter business
person startup a better run alternative in the Portland area. There are myriad
examples of shared spaces that aren't losing money.

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absconditus
"CubeSpace has a 15-year lease with U.S. Bank, and owes $12,000 a month."

Are leases of this length common?

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mrkurt
Yes, commercial leases are routinely 10 years or greater.

Sears would actually ask for 100 year leases on property, and at first the
landlords were pretty excited about it. After some time, though, the market
value of those leases became much higher than Sears was paying. I doubt the
landlords were quite as happy when Sears turned around and subleased the
property for much, much more money.

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mediaman
10+ years are common for more mature businesses. Usually the leases I've
signed are 3-5 years (three is the shortest they usually come for commercial
space). Most leases are 7-10 years; bigger or more established companies will
do 10+.

Sometimes people go for long leases because the landlord will pay for tenant
improvements (which can be tens or hundreds of thousands of dollars) or rent
abatement. Long leases are occasionally engaged in by excessively optimistic
entrepreneurs who see an opportunity for free money (rent abatement or TI) and
who assume they'll be able to pay for it out of revenues by the time the
abatement ends.

You're right about Sears though. Some investment analysts look for real estate
plays in non-real estate companies when they have very long undermarket leases
that could be worth a lot of money if sublet. (Or owned property at very low
historical cost, but that's a separate discussion.)

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edw519
As a human interest posting, this was great. Finding goodness and generousity
in the face of darkness is always a heart warming story.

As a business posting, this was irresponsible. Hmmm, begging for donations
when my startup fails? I think I'd rather get a job (perish the thought).

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pg
Blogger survived on donations at its lowest point.

