It’s become something of startup lore that founding your business in a garage or basement is a rite of passage. And it makes sense: When a company has only a handful of employees, unconventional spaces can give a fledgling team space to create a product with minimal (if any) overhead weighing them down. But once you’re on solid ground with a growing team, how do you make the move into a more permanent space that fits your company’s needs?

According to CBRE’s Lukas Ault, start with the reasons you’re looking for new space. “Every company has different priorities as it relates to space. Generally, what we find is that companies with one to five people can cut corners, but once you start expanding into multiple teams is when you need functional space for different business units to operate and collaborate.”

And despite what the zeitgeist might suggest, startup founders want more in an office space than cold brew on tap, room for a ping-pong table, and a big snack pantry. Startups are looking for the same things legacy companies want in an office—a space that fits their needs in a prime location surrounded by relevant resources.

Taking the Leap

Take Winc, for example. Founded in 2012, the digitally native company set out to build a more personalized, accessible wine club. Winc is a California-based winery that today offers an online membership experience for hundreds of thousands of wine enthusiasts. For its office space, cofounder Geoff McFarlane says the reason Winc moved was simple: It needed more space.

“In the beginning, when we were only three or four employees, we bounced around a lot between some of our investors’ ancillary spaces. Then we found a small, semi-permanent space where we grew to 14 employees,” McFarlane explains. “But it was the size of a shoebox. We were bursting at the seams.”

With strategic investments in place and a more consistent monthly revenue, the team felt comfortable starting to seriously look in Los Angeles for a permanent office space with specific criteria.

“We hated the traditional office building with darkened windows and an elevator from the parking garage up to your floor. We wanted somewhere that could open up, with an indoor-outdoor workspace and an open floor plan where everyone could interact, but also with enough conference rooms,” McFarlane says.

Calculating Future Growth

Not surprisingly, the biggest challenge for startups looking for an office is determining what size space they need—not only now, but in a year and potentially five years. Shorter-term flexible space, compared to long-term leases, often comes at a premium, though it’s considered a worthwhile cost when a startup’s future looks bright.

“The recent proliferation of coworking operators is providing ultimate transparency and flexibility in an industry that traditionally had been lacking those components,” Ault explains. “Coworking gives startups a chance to dip a toe in the water, in that they’re committing to a dedicated commercial space but not signing a long-term commitment. And if they scale up and need more space, there’s no lease to break. It’s really the flexibility that’s attractive as opposed to the size/design of the space or the operator.”

Wondering whether Winc found their ideal office space? It did—and then some. In August 2014, it moved into a converted industrial building that has sliding glass doors that connect the office to a lush, outdoor patio. There’s loads of natural light, an easy parking lot, and plenty of walkable lunch options.

“We lucked out with our building in that we have the opportunity to extend our office to the space next door as we need it and as it becomes available, so we felt comfortable signing a long-term lease,” McFarlane says. “While we were looking for a space that took advantage of the best aspects of LA, our requirements were more about a great space for our employees.”

Sounds like Winc found both. And while the hunt for a new office space is rarely a straightforward process, understanding the market and all available options will help startup occupiers have a clearer view of what to expect from their own office searches.

Trying to determine the best tech labor market for your startup? Visit our 2019 Scoring Tech Talent report.

SIGN UP FOR UPDATES

Get the latest perspective and insight on Agile Real Estate straight to your inbox.
SUBSCRIBE

Recommended

REAL ESTATE THAT SOLVES FOR "I DON'T KNOW"

HYPERSCALE: THE ROUGH GUIDE TO STARTUP REAL ESTATE

THE ECONOMICS OF EXPERIENCE DESIGN