

The Coming Depression in Commercial Real Estate a/k/a Cheap space for startups - landist
http://online.wsj.com/documents/CREOutlook20090325.pdf

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rdl
I'm much more excited by cheaper rents for residential real estate, or
commercial to residential conversion.

For an under 20 person startup, a suburban house is actually a pretty ideal
office; the only potential problem is neighbors complaining about parking and
high foot traffic. In low budget mode, most of the founders live AND work in
the same house, but even later, using the house as an office with crash space,
while founders live in other houses, works well. Plus, rentals on high-end
houses are way under mortgage costs, and cheaper per square foot than
commercial real estate. Most of the features people want in a great startup
office (private workspaces and larger rooms, great kitchens and bathrooms,
rest areas) are present in a house much more than an office.

For a zero-stage startup, you have to sleep somewhere anyway, so pooling your
housing costs and living together makes sense. And eliminating the commute is
a big win.

Las Vegas, with the large supply of high-end houses, 24x7 things to do, and
NV's favorable state tax law, might be a great place for a startup.

FIOS or metro fiber would be a big plus (or some kind of fixed wireless).

The only way I'd take commercial real estate early on is if the business
requires a lot of big dumb company client contacts, or if a commercial
landlord were willing to take a convertible note or something as payment.

I've seen a few angel investors who threw in use of a vacation home as office,
too, which works great.

