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A comment on 42Floors (YC W12) Raises $12.3M Led By NEA . Parent comment

Re:42Floors (YC W12) Raises $12.3M Led By NEA by BroNamath on Friday February 01, 2013 @12:16AM (#5149336)
This site seems short sighted. "Tech startups" will soon be an undesirable tenant. Landlords are looking for long-term leases from credit tenants (it's how you sell a building: the stable rent roll. No one wants unsustainable income from a hot sector). They are taking tech startups as tenants now because they overpay for space (with angel money), that would otherwise sit empty. Once the seed money dries up (or Round A, etc) startups will be unable to pay rent and landlords will soon lose their appetite for small short-term leases at above-market prices. Just wait to experience the herd mentality of real estate investors; obviously no one on your team seems to want to remember 2007? Why would they if they are on the payroll of a funded startup and no longer humping it out for RE commissions.

I have spent time on your site and it’s no less convoluted than loopnet, costar, or craigslist (and about 100 others). To me, 42Floors is a prime example of the recent startup mess. An over engineered site with too much funding that no one really needs.

Congrats on your enthusiasm and good luck with your pivot.

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Re:42Floors (YC W12) Raises $12.3M Led By NEA by popmikeup on Friday February 01, 2013 @06:21AM (#5150218)
The current market is completely out of sync with the real value/costs of commercial property. The field has insulated itself from true price discovery for so long that it is starting to hemorrhage.

This isn't really about finding 'tech startups' a home, but rather that there's a chance that any new business starting up will need office space. And don't forget, current office-space tenants are going to start wondering why they're paying such inflated rates and the people across the way are paying 25-whatever% less for the same kinds of space.

Don't focus too much on new converts; think about everyone paying more for office space now than they need to.

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