Market Study and Research 9/5/16

Competitors
Storefront
Summary: Online marketplace for pop-up retail/events
Actionable Info
Narrow proof point of our business model
Examples of market demand, finances, etc.
Location: Big markets (LA, SF, NY, HK) -- a limitation
Website: https://thestorefront.com
Source: http://www.nytimes.com/2013/12/22/fashion/Pop-Up-StoresStorefront.html
Competitors: Concert booths, real estate agents
Suppliers
Landlords, renters (for subleases)
Example: Nightclubs in daytime
Supply drivers
Desire for flexibility, less overhead
Zoning changes, buildings getting demolished
Shorter-term leases, unmonetized gaps between leases, offpeak
vacancies
Subleases
Demand: Artists, brands, boutiques
Online stores/showrooms (e.g. clothes)
Price: 6-12% commission to renters
Also provides general liability insurance (unclear if part of 6-12%)
Example: $1,550 a day in New York for Kanye West (355 Bowery)
Competitive advantages
More direct to consumer -- reduced fees, etc.
More accessible than concert booths (location and time)
Generates big buzz with fan communities
Background
Started March 2013. HQ in SF
Founders: Tristan Pollack, Erik Eliason
Airbnb of retail
# of spaces: 300 in SF, 200 in NY (as of Dec. 2013)
Problem to solve: 1/10 US stores is vacant
Vacant
Summary: Provides turnkey services for pop-up activations and brand marketing,
for brands and prime real estate acquirement
Actionable info: Possible adjacent services we can branch out to. Needed
services
Established 1999
Deep base of brokers, agents, property with liens, non-paying tenants
Reviewed over 1,260 short-term license agreements
Will pay security deposit: $3,000-35,000
Business model: Scouting fee plus upsell for marketing services
Example: Major events/holidays like fashion weeks, conventions

Other services: Event management, security, consulting/design,

technology/POS, forecasting, staffing, sourcing/buildout, acquiring real estate,
social media, legal assistance/permits...
Other info
Many websites work with tenants to sublease, not property owners
14-days minimum recommended to prepare a site
Website: http://govacant.com

This Open Space

Summary: Online marketplace for short-term commercial space
Location: Big markets (NY, Toronto, Vancouver, Ottawa) -- a limitation
Website: https://thisopenspace.com
42Floors
Summary: Online index of business places for rent (e.g., coworking spaces,
sublets, executive suites)
San Francisco, CA. $17.4m funding thru Oct. 2015
Cityfeet
Summary: Online index of commercial property listings (not short-term). Not
really a competitor, but a source of info on leasing (process, terms, etc.)
Flexe

Summary: online marketplace for short-term warehouses

Knock, Renticity (Seattle, WA)

For property managers, landlords
Each raised over $1m in year thru Nov. 2015, according to
Pitchbook
Liquidspace (Palo Alto, CA)
$26.2m funding thru Oct. 2015
For startups looking for offices
No complex leases/hassles. Handles terms & agreements,
transactions

FLEXE makes on-demand warehousing possible by connecting

organizations in need of additional space to organizations with extra space. Our
cloud-based platform powers unified warehouse sourcing and set up, while also
streamlining material handling operations. FLEXE requires no technology
investments, long-term leases or process interruptions. As a result, adding
storage capacity is now easier, more flexible and more cost effective than ever
before.
We are a team of technology entrepreneurs and logistics experts
headquartered in Seattle, WA.

Others

Book space on month-to-month basis, upgrade anytime

US, Canada, Australia
Tool for owners to advertise their spaces
Pivotdesk (Boulder, CO)
$6.63m funding thru Oct. 2015
Craigslist or Airbnb for office space
Connects businesses with shareable space to potential customers
TheSquareFoot (New York, NY)
$2.47m funding thru Oct. 2015
Interactive online search/concierge service to help companies find
office space -- listings of commercial space and brokers
Republic Spaces (US), We Are Pop Up (UK), Pop-Up Insider
Marketplaces for pop-up space

Research
Emerging Trends in Real Estate 2016 (Sep. 2015)
Pricewaterhousecoopers and Urban Land Institute
Example model: Coworking sponsor leases space from landlord, subleases
equipment or whole space with extra amenities. Operating margin ~30%
Struggling suburban office parks with vast parking, especially in Midwest (B
centers)
Find Office Space (Mar. 2014)
42Floors
Actionable Info: General lease information
Time to move in: 1-3 people 24 hours (coworking space), 10 people weeks
(sublease), more requires lease (few months)
One month to find an office, two more months to
negotiate/buildout
Lease issues: Exit strategies (expansion, termination, contraction, sublease,
renewal)
Termination and contraction: Often not accepted by landlords
Advisors: Attorney, broker, tenant representative, architect, listing
agent
Load factor: Unusable space like hallways
Common area: Shared area like restrooms, lobbies, elevators -14-20% of floor
Opex: Utilities (HVAC, electricity, gas, water), taxes, janitorial,
maintenance
Responsiveness of property manager; building security (alarms,
locks, etc.)
Getting a lease
Office equipment dealers will layout floor plan for free
Landlords may not do space rendering for shorter leases


same terms

Landlords often allow upgrade to larger space in property for

May also give tenant improvement allowance, e.g.

turnkey buildout
Pre-existing condition clause (return
to original when vacate)
Significant construction may require project
manager, workplace designer
Be careful if landlord asks for personal guaranty
Management and administrative/maintenance fees
Rentable square footage = Usable square footage * (1 + add-on

%)
Example pricing in NY/SF
750 ft^2: $7,500/month (5 people, shared space)
3,000 ft^2: $12k/month (20 people, sublease)
15,000 ft^2: $55k/month (100 people, lease)
Lease types
Full-service (all-inclusive), most common for smaller tenants
NNN (Triple Net), standard for single-tenants -- fewer services like
maintenance
Gross (like full-service), for industrial buildings
Commission of 4-6% of lease value. Split between listing agent
and tenant rep
Tenant reps may not help if lease is short or location is small
Building types
Class A: Central location, larger size, newer
Class B: Older buildings or non-prime location
Class C: Lower quality (no elevator, AC, etc.)
Buildout example costs per ft^2
Building standard: $25-43
Above standard: $33-54
High finish: $48-70

Ultimate Guide to Pop-Up Shops

https://www.shopify.com/guides/ultimate-guide-to-pop-up-shops
Things to consider in a space: Camera, Wifi, washroom, lighting, stock space,
acceptable modifications, signage (window display), transit access
Other needs: Promotional marketing (like launch/press events)
Are Pop-Up Stores Here to Stay?
http://knowledge.wharton.upenn.edu/article/are-pop-up-stores-here-to-stay/
Possible sites: Public transit, parking lots, markets
Payment options: Flat fee, % of rent, % of sales
Short Term Leases
https://42floors.com/edu/beyond-the-basics/short-term-leases-how-to-findflexible-leases-and-when-to-go-with-a-sublease
Commercial minimums are often 3 years and 1,000ft^2

rates

is)

Pop-up rental rates can be up to 50% lower than ordinary leases

Executive suites: 1 week-1 year term, flat fee, no insurance/maintenance; high
Similar: Limited services offices, no-service business centers,
virtual office, coworking space
Sublease: 10-50% cheaper than rentals, flat fee, turnkey, shared amenities (as-