Technology changes the owner/tenant relationship.

While technology related tenants still occupy a relatively small percentage of commercial space in New Jersey and nationally, the rapid growth of this sector has already had a noticeable impact on the business of real estate. Dot-corns have not only helped to revitalize older, previously unattractive warehouse buildings, they have begun to prompt a new era in tenant-building owner relationships.

To compete in the ever-shifting world of e-commerce, technology companies require advanced wiring, redundant power, around the clock operations, wireless services, onsite facility and network management and dedicated climate-controlled server rooms, among other items.

Beyond infrastructure however, dot-corn companies present many new challenges and opportunities for building owners. An e-commerce start-up that takes 2,000 square feet of space in a building may expand to 10,000, or 50,000 square feet for that matter, before the first year is over, Or, it may not be a tenant after 18 months if it looses its funding source.

The increased opportunity and increased risk of the shift to the so-called new economy is causing more entrepreneurial owners to consider non-traditional lease structures with these tenants. Some building owners in cities beyond New Jersey have already embraced risk and opportunity by taking equity or stock options in lieu of rent for promising Internet companies. Even those owners who insist that their tech tenants pay full freight are still taking a significant risk, or making a significant investment, depending on your perspective. When tenants have no income, no credit history and no long-term stability, a larger than normal security deposit cannot protect an owner from empty space.

Just as it is critical for a venture capital firm to scrutinize a prospective start-up. it is critical for an owner to examine the tenant in which it will invest. As a result, technology tenants are usually in store for a more extensive interview than more traditional tenants. Many owners actually speak with VCs to determine if a new company's prospects are truly promising - no one wants to miss an opportunity, but no one wants to make a bad bet.

When the Internet economy matures, this kind of risk-taking may not he necessary. However, until that happens, both building owners and would - be dot-corn superstars will negotiate in an uncharted environment. The new trends they set may spill over to other industries, creating a new way to view the owner/tenant relationship.