Four years ago, David Cummings bought an aging Buckhead office building that was 30% leased, and turned it into the premier destination for tech entrepreneurs to start their businesses with flexible space, tons of benefits, amazing culture, and engineered serendipity to create meetings, conversations, and opportunities that would otherwise simply not happen. Atlanta Tech Village now boasts over 1,000 members, more than 250 startups, and seven graduates.
Several of those graduates moved out of The Village and moved in next door, most of them signing a three or five year lease. That’s what Qgenda did several years ago as they began to scale. When Qgenda grew out of their original office space at the Ravnina, Qgenda CEO Greg Benoit experienced the problem he now sets out to solve. After Qgenda began to grow, they signed a 3 year lease in their first office, but quickly outgrew the space. Didn’t matter: they were stuck. So, they signed additional leases and pretty soon had offices all over the building.
Startups in growth mode need flexible leases as they grow to 50, 100, or 200 employees. The pain involved in realizing you’re stuck in a 5 year lease when you’ve outgrown the space after a year or so is real pain.
Startups seeking short term leases will pay slightly higher per square foot rates than traditional office space like Piedmont Center just up the street in Buckhead or even ATV, though ATV charges by the person rather than by the square foot of space. A three-year lease at Piedmont Center usually costs about $26-$27 per square foot. The same space at ATV works out to much more, but comes furnished with free WiFi, snacks, coffee, beer, and month to month flexibility.
TechRise tenants on 6 – 12 month leases will pay roughly $35 per square foot. That’s what we call “paying for flexibility.” Benoit hasn’t offered up any plans for remodeling the building like Cummings did to ATV, mainly because 3405 Piedmont is currently 100% leased. Josh Hagler, Tenant Representative at Transcend who will be leasing the building, says they expect to begin leasing under the new structure in 4 – 8 months.
So, ATV broke things open for the tech space 4 years ago. Since then, Atlanta has added WeWork, ROAM, Strongbox West, Industrious Office, Techsquare Labs, Prototype Prime, and now TechRise to the tech office space landscape. This type of CRE problem solving is exactly the type of thinking that will continue to propel Atlanta up the tech startup scoreboard. Well done, Greg and Transcend!