The Exchanges

Q Yeah, they had a huge lease, right? Huge, right?

A Over 200,000 square feet. Um, yeah, you know, and, and like, and then you look at like the companies like Loom that are, Uh, or, you know, one of our clients Brex that are creating these amazing cafe spaces that are like, um, you know, uh, perks rather than like, you know, um, hubs that you have to go into. Um, and so, you know, uh, Thumbtack is actually designing like a library. So they're going opposite. They're like, you only do focus work here, you know? So it like a lot of companies, a lot of really amazing creative companies, a lot of unicorns are going to be experimenting, but what they do know is that. Um, you know, that it is just so important to, to, to create that connectivity, whether it's every day, a few times a day, a few times a week, or even a few times a year, where like, yep, off sites or onsites become the new off sites.

AI assessment note: “Over 200,000 square feet.”

Q Atlanta, Miami, stuff like that. What are you seeing in Atlanta, Miami, Austin? Like what's, what's, what's you seeing there?

A Um, like huge growth, you know, um, uh, uh, uh, Facebook just did the biggest office lease in history in Austin. Um, it, like, you know, residential numbers are crazy. Um, the, the, the growth of, of, of, um, rental rates in Miami is insane, and they're, you know, trying to build buildings, you know, as fast as, as possible. Um, you know, I'll, I'll be spending some time there soon as well. Um, hopefully I can make your event. Um, you know, like the office, so we were looking at studies from, um, Companies that a badge, you know, companies, so like that they like, you know, um, you have the real data. They have the real data. Um, so on average about 30%, 33% across the country, um, are, are, are back in regularly, um, according to like, you know, the badge data. Um, but, but definitely in kind of like, you know, Southern states, it's, it's much higher, right? It brings up, brings up the average. Um, and you know, like places like Houston, I think is, is, Is across the board, you know, almost a 50%. Um, and so that's where the fascinating data is, is, you know, um, where, where, um, the pandemic has kind of been over, and people are, there's been no restrictions. Like, you know, you do see folks that, like, want to get back.

AI assessment note: “huge growth... Facebook just did the biggest office lease in history in Austin.”

Q Miami meetup shortly, but they're having a huge in-person presence. So what does that, like, I think that's, Maybe one of the more radical ones, more radical than Figma, right? How are, what have you learned? How are they thinking about using this space? Um, when they went from overnight to massively in person to very distributed, like what's in there, what are they trying to get out of this?

A So, you know, like, you know, hybrid actually is starting to kind of get a, almost like feel like a negative word or something. It's just a spectrum of how people want to run their companies. Yeah. Um, Uh, with Brex, they're remote first, kind of like Coinbase, and, and others, where like, Everything that it takes to run the company, how they communicate, everything is done digitally, right? Um, you know, through, through all the different channels, whether it's async, sync, whatever. Um, and so the, the places that they're creating, um, are, are, are to bring people together when they want to come have like a very, like, you know, uh, collaborative kind of just in-person fun, fun experience. They're not there to kind of do heads down work, similar to Dropbox that like, You only go into these spaces to like meet up with other people or clients or whatever.

AI assessment note: “the places that they're creating, are to bring people together when they want to”

Q more. We're paying, even our little team, which doesn't get, we're paying, I'm paying twice in rent what I did before all of this. So as founders, uh, and, but there's a handful of startups I work with that pay no rent now, right? But on average, you think this is going to drive costs up because we need more spaces and there's not less effective density in our headquarters?

A Um, It's hard to tell. I mean, so many things are, um, inflated in pricing and things like that. Construction costs, furniture, everything's taking longer. Everything's more expensive. So, so like that stuff will level out. Um, and then I think that like the other thing that we've seen is that, um, if the strategy was just take as much space as possible, concentrated in one place, um, we like companies have been really effective at like subleasing, you know, floors, uh, to other companies. And so, you know, Um, like, uh, Brian Armstrong had a great post, um, the CEO of Coinbase. He's like, I want, you know, um, one floor in 10 cities rather than 10 floors in one city, right?

AI assessment note: “It's hard to tell. I mean, so many things are, um, inflated in pricing”

Q And so that's a big topic. Maybe we can get to it in a minute. The citizen thing is something we've, we've all had to figure out now, right?

A Totally. Um, so yeah, so I think it's like, they're all, we're going to experiment like crazy over the next few years, which is going to be unbelievably fascinating and exciting. Um, and then, you know, uh, learning like what, um, you know, companies like Airtable or Figma or Loom, which are also doing those kinds of creative, like, You know, um, hubs, but like you're, they're not designed to just kind of go heads down work. Um, and, um, you know, there's not going to be a one size fits all, but I think we're going to learn such amazing things coming out of this. Um, you know, but from the headlines to like the reality, uh, you know, even companies as big as, you know, Google and Meta are expecting the vast majority of their employees to come at least a few days a week.

AI assessment note: “Totally. Um, so yeah, so I think it's like, they're all, we're going to experiment”

Q as Adobe. So related question. Well, how does load work on spaces? How many square feet do I need for how many employees that are there? How many are we jamming? Are we going to jam even more people into our office? Is it less? How does this load and head count per square foot math work in this new world? Cause I don't know what the formula is anymore.

A So, um, oh man, a lot to unpack here. So, um, what's fascinating, um, the U S uh, Bureau of labor statistics, just, just published some really incredible numbers and, you know, Harvard Business Review, Business Insider, Bloomberg all covered it. Only 5.5% of businesses have reduced their, their square feet, um, relative to how many employees they have, um, in the country. And, um, there's a lot of reasons for that. Um, but what we're seeing is that like, and, and by the way, love it or hate it, the vast majority of companies are going hybrid, right? Like, you know, we, we did a study of the top 160 YC, most valuable YC companies Um, published last year, uh, 81% of them are going hybrid in some form or fashion.

AI assessment note: “Only 5.5% of businesses have reduced their, their square feet, um, relative to how many employees”