Thursday, May 29, 2014

Leasabl: Providing small businesses space to grow

by Kristin April Kim
May 28, 2014

    Kristin Kim/MEDILL

    Leasabl's four employees currently work out of 1871, Chicago's entrepreneurial hub for digital startups.


    Kristin Kim/MEDILL

    CEO Jason Goodrich of Leasabl says that many people at 1871 are potential Leasabl users, for they will       need to search for a new space when their business grows out of 1871.

Jason Goodrich was frustrated.

After all, his wish was simple: To find a space for his new business at a reasonable price. Instead, he was stumbling into spaces that were much too long-term, pricey and large for his needs.

Unsure that his business would last more than three years, he couldn’t sign a long-term lease. Months of searching coupled with a frustrating lack of flexibility in price and contract terms finally made Goodrich call it quits.

That’s when he asked: What if there was a way to make it easier for small startups to open their doors?

Goodrich’s space-seeking woes inspired him to create Leasabl, a website that connects short-term space seekers directly with property owners on terms that Goodrich says are much more reasonable and transparent.

“Up 'til now, the field has been tilted towards land owners and brokers,” he said. “They own the supply so they write the rules, thus there’s this lack of transparency that’s challenging for space seekers to access from the outside. They have no choice but to choose from what is offered.”

But not anymore, at least in Goodrich's view. Leasabl, he says, lays out all available short-term spaces on its website for seekers, property owners and brokers to see. With a model similar to Priceline and AirBnB but for office spaces, Goodrich contends that Leasabl mitigates risk and maximizes efficiency for all parties involved.

For example, though Leasabl receives 10 percent to 25 percent of each month’s rent from property owners, Mike Lombardo of Blue Star Properties agrees that that it is “found money” for property owners.

“They’re giving us a great short-term solution,” he said. “Obviously we want long-term tenants but when we can’t find them, a space might stay dark for a few months or longer. So while it's sitting there, why not plug in a young company that can’t sign a long term lease because they're new, but want to move in somewhere?”

Leasabl has been in business since receiving $35,000 from angel investors and has accepted over 40 applications from space-seekers to date. The company, now run by Goodrich and three others, faces more demand from space seekers than it can handle.

“Demand in the loft market in particular, with the whole exposed bricks and concrete look, is through the roof right now,” explained Lombardo. “They’re popular not just for the aesthetic appeal but also because it’s the right price point for young, innovative tech companies, which is what Leasabl is catering to.”

Though available inventory is small and changing, Goodrich says that this is a problem that can be resolved as Leasabl continues to increase its number of partnerships.

“We have five partners lined up with us on the supply side, two of which are global landlords,” he said. “Their supply is leased up for now, but we’re continuing to look for people wanting to use us on both the demand and supply side.”

Bradley A. Serot, senior vice president of property manager CBRE, also says that Leasabl is filling a niche for startup clients who are looking for a ready-to-go, flexible solution.

“It’s not that we’re focused on the short term; brokers are usually going through a longer consulting process for companies that usually results in a longer strategic outcome,” he said. “Leasabl is a nice additional place to go find companies that have a short term need and I think it has tremendous growth potential.”

Goodrich boasts that Leasabl is revolutionizing the retail real estate industry by allowing emerging companies to sign short-term options in an environment made easier and more transparent than ever.

“It’s a $80 billion opportunity, and that’s just the size of the hole in our market,” he said, referring to the $535 billion office and retail leasing market.

Lombardo agrees and says that it’s “win-win for everyone”.

“He should talk with every landlord in the city because the more options he has for his clients, the more he’s going to place, and there’s definitely room for growth,” he said.

While Leasabl has ambitious plans for national expansion, Goodrich says the company intends to remain true to its core values.

“We’re trying to create a market where you can book a space in minutes,” he said. “Our mantra is this: a space should define a business, not confine it.”

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