Silicon Valley Startups Stir Memories of Dot Com Bubble

Nowhere is the growth of the economy more apparent than in the world of startups. Particularly out in Silicon Valley the jaw dropping expenditures of startup companies are making some people nervous. Many are seeing a parallel with the dot com bubble of the 90s, where money gushed into tech companies until the bubble burst, and all the money evaporated seemingly overnight.

There are several concerning aspects to these ostentatious expenditures. Obviously, cost is one of them. Today in San Francisco’s chic South of Market area, average rents are approaching $56 per square foot for commercial space. More than cost however, the length of lease terms is concerning. Startups with just a few employees are securing 10 and 15 year leases for significantly more space than they need, with the intent of growing into the space. Those reminiscent of the dot com boom and subsequent bust shake their heads at these decisions.

Pragmatic startups would be wise to conserve their newly won seed financing and locate themselves in more reasonable markets. Gainesville, for instance, boasts several advantages. Most importantly would be the proximity to a robust research university firmly planted on the global stage. The University of Florida is very startup friendly with projects such as Innovation Square, the Florida Innovation Hub at UF and Progress Park. What’s particularly exciting about Gainesville is the price of this proximity. With average rents less than half of San Francisco’s, and a very attractive cost of living, Alachua County provides some very compelling reasons for startups and tech based firms to reside. 


Click here for the full article, or click here for more Front Street news...

Comment /Source

Nick Banks

Nick created Front Street Commercial Real Estate Group in 2002 and spent the first eight years developing and acquiring office and retail projects in South Florida as well as North Central Florida. In 2010 the focus of the firm was shifted to primarily serve third party clients and perform brokerage, property management and mortgage banking functions. Nick has personally developed and acquired nearly 200,000 square feet of office and retail properties in markets throughout Florida. Prior to founding Front Street, Nick was the Director of Finance and Dispositions for Stiles Corporation in Fort Lauderdale where he financed and sold over $500 million in commercial real estate. Before joining Stiles, Nick was an Associate Director at GE Capital Real Estate where he sourced over $200 million in financing throughout Florida. Nick is a graduate of the University of Florida with a degree in Finance and a concentration in Real Estate. He serves as a board member and current vice-chair for the United Way of North Central Florida where he also chairs the Development Committee. Nick is actively involved with the Gainesville Area Chamber of Commerce where he serves as a board member and committee member for the Council for Economic Outreach. He is also a recent graduate of Leadership Gainesville which is a year long leadership program hosted by the Chamber. He is a member of Grace United Methodist Church where he has served as finance chair and as a member of the leadership council. Nick serves as an advisory board member of the University of Florida Bergstrom Center for Real Estate Studies. Nick was recently named chair of the Gainesville committee for the North Florida chapter of Urban Land Institute (ULI). He is a licensed real estate broker in the State of Florida and is a long time member of the International Council of Shopping Centers.

 Subscribe in a reader

Subscribe to Front Street's News Page by Email