High-Tech Firms Inspire New Real Estate Trends.

Our experience in representing the real estate interests of Emerging Technology Companies in Southern California has provided valuable lessons from which oldline companies may benefit.

They have shaken things up and have forced the rest of the world to take notice and consider new ways of doing business and decide whether or not to change as well or stick to the status quo. With the business world and the real estate world transforming so swiftly, the areas of change have been pushed to the extremes, and the extremes often teach us what to do and what not to do:

Companies must learn who they are and are not

The notion of a casual dress code in the workplace is no longer a novel concept. Emerging Technology Companies started the trend by simply refusing to be uncomfortable. As a result, every company has been forced to determine its own dress code policy.

Some Corporate America companies, like Taco Bell, determined that the interaction and creativity resulting from the casual environment of the company retreats was so valuable, that company "went casual" everyday.

Ultimately, the soul-searching regarding clothing, has enlightened some companies with a more clear vision of their corporate culture and their corporate mission.

Other companies have used the casual dress code to help make a point At Inflow, the colocation company encourages Aloha shirts on Fridays. The policy supports the company's positioning within ifs competitive industry as a more inviting company to do business with.

Consider using your office space in new ways

Emerging Technology Companies have transformed the way people work together in physical space. New ways of utilizing space has encouraged the sharing of ideas and has provided a more comfortable environment for people while at work. The trend towards fewer boundaries and partitions and greater sharing and teamwork has been increasing in all kinds of companies.

Part of the minimalism of open space layouts was borne out of necessity. Start-up companies on shoestring budgets and accelerated growth schedules selected inexpensive space and no-frills furniture with a focus on speed and creativity.

Since then, the extremes of creative space have been tested. The term "creative space" has been used and abused. The term is tagged onto office, industrial and retail space. It is no longer inexpensive, and now even includes junk space located above liquor stores.

Money is ALWAYS an object

With the goal of recruiting the best talent in an effort to beat the competition to market, Emerging Technology Companies, as well as old-line companies, are now often faced with space options that are simply not worth the money. The frenzied demand for creative space has resulted in a very low supply of desirable, functional space.

A herd mentality has companies focused on small geographic areas, while great values may exist just a few miles away. Companies need to challenge industry bias and personal influences. Money saved on excessive rent may otherwise be used to expand and improve facilities and enhance employee compensation packages.

The search for space needs to be organized

While the race against time has never been more intense, companies need to be careful not to jump into the real estate world without a plan. The speed of the economy has left in its wake many frustrated business people, missed location opportunities and botched transactions.

There is no question that companies need the services of a qualified real estate broker now, more than ever before. Be sure that your representative is truly qualified for the specific assignment and is not just learning on your company's requirement and taking advantage of the new economy.

Further, your in-house point person needs to be armed with common sense and be qualified enough to understand how the facility options may meet the company's immediate and long-term objectives.

In haste, some companies carelessly assign multiple people similar real estate tasks: Lack of communication and coordination can be catastrophic if the company becomes committed to the wrong building, or to more than one building at the same time.

When you find the ideal space, don't lose it

The current real estate market is moving quickly, and the quality, functional spaces in the high profile buildings always get leased first. If you identify a space that meets your company's criteria and represents a clear value relative to the other available opportunities -- move on it immediately. Most companies learn this lesson the hard way and miss the one that got away.

Plan for expansion and contraction

Some space, although meeting the company image profile, may not represent the best strategy with regard to flexibility. As experienced by many Dot Com companies, expansion can occur swiftly. In many cases the expansion has been anticipated. Downsizing may need to occur just as swiftly. If an exit strategy is not anticipated, the financial burden may be critical. It is important for companies to consider the possibility of a downsizing scenario and attempt to layout space to provide for possible separation.

Hire experts whenever possible

Emerging Technology Companies need the help of outside experts to achieve their growth. Outsourcing allows companies to position themselves with much larger companies, while allowing them to focus on their core service and product. Outsourcing also allows companies to utilize space efficiently.

Consider outsourcing your company's human resources and employee benefits functions. Trinet provides growth companies with a national platform and critical mass so that the smaller company enjoys leverage similar to that of a Fortune 500 company.

Consider outsourcing some of your company's IT and networking functions. All Bases Covered provides comprehensive IT services enabling companies to select, install and maintain the appropriate technical infrastructure.

Anticipate any required governmental approvals and permits prior to lease commitments

Many Emerging Technology Companies require specialized facilities and clean rooms so that they can prototype and manufacture their products. What is surprising is that some companies neglect to seek the appropriate governmental approvals required to allow them to do their work.

When hiring a real estate attorney, hire one that shares your sense of urgency

Companies on a very strict time schedule must be sure to investigate that each member of a real estate team shares its sense of urgency. While the primary role of the real estate attorney is to protect the client and inform the client of any potential exposure to risk, It also very important for the attorney to be committed to getting the transaction done.

Be open to new technology solutions

Having a strong appetite for new ideas, Emerging Technology Companies are generally eager to embrace new solutions to old challenges. The Internet and now Application Service Providers (ASP) are changing the way business is conducted. It can be enticing for a company to select a "Bundled" communications product offered by a single provider. However, businesses must be careful not to get locked into a single provider solution - often key services of the bundle no longer meet their needs as their business grows.

Los Angeles-based CLECnet, Inc. has a unique solution to this increasingly complex business problem. Customers choosing their OMNIS broadband solution are free to select the services they want from the provider, they choose to create the best business solution for their needs. The customer creates their own value proposition. The customer is also free to change providers at any time.

For emerging companies, the flexibility of OMNIS provides a fully scalable solution that can evolve with their business. For expanding companies, OMNIS-can provide a business with a fixed telecommunications cost.

Dennis Smith is Vice President/Managing Director with Travers Realty. Greg Maradel is also a Vice President with Travers Realty. Travers Realty are Tenant Brokers specializing in representing Emerging Technology Companies in Southern California.