At Rofo we track the number of searches performed on the site.  These graphs represent the number of searches made per month by Rofo users for 126 cities in the 5 major Bay Area regions, East Bay, South Bay, Peninsula, San Francisco and North Bay.  Commercial space search volume helps give an insight into small-business health and formation in the Bay Area.  The majority of these searches are for spaces under 5000 sf and includes office, R&D, industrial, warehouse and retail space searches.

The East Bay is a largest region and receives the most searches on Rofo.  The cities range from Oakland, west to Antioch and south to Fremont and everything in between.  The south bay comes in second in search volume and includes cities like San Jose, Santa Clara and Sunnyvale.  The Peninsula, San Franciso and North Bay regions all have similar search volumes that average around 5000 and under per month.

The first general trend is a slight spike in volume for all regions in March 2009.  It seems that the pent up demand accrued during the worst parts of the financial crisis in the latter parts of 2008 and early 2009.  In March 2009, when businesses realized that the financial system was not going to implode they began to search for space again, leading to a slightly higher search volume.  However after the March spike search volumes declined in each region until August.  Search volumes have remained fairly stable through 2009, but definitely have not increased.

Obviously any kind economic recovery, which depends heavily on the ability for small businesses to grow and establish themselves, hasn’t quite taken root yet, or at least isn’t reflected in Rofo’s search data.  If a recovery does begin, it would be reasonable to see an increase in businesses searching for space, either to expand or start up.  Unfortunately we haven’t seen evidence of that quite yet.

It can be difficult to know exactly what information to include in your available listing, but we thought we would share some tips. Our customer service team spoke to nearly 1,000 small businesses in October who were searching for space and we thought we would provide some real time feedback for the best way to market available space to these businesses. Below are some tips:

• Price: Absolutely, 100%, every time, price your listing every where on line. The small business understands that if they ask for improvements, the price might increase. If you want to get qualified inquiries and more inquiries, price your listing. The theory that you might get a business to tour by un-pricing a listing and then they will fall in love with the space regardless of the price does not work!
• Square Footage: List each square footage that you have vacant separately so businesses with specific needs can find your available space. If you have a space that is 3,000 square feet but is divisible, list each square footage that it is divisible to.
• Pictures: Interior and Exterior and the more the merrier.
• Floor plans: For both office and industrial users, a floor plan is requested very frequently. If you don’t have a floor plan, describe the layout in the description.
• Description: In the description, discuss the positives of the space and the location. Discuss nearby amenities and companies in your building. Call out specific business types that would be a good fit for the space or who have leased the space in the past. If the building is a great fit for therapists of a gym, add that to the description.
• Video: There aren’t that common yet in commercial real estate, but more and more businesses are viewing videos already on Rofo.com. It saves everyone time and makes a space stand out. If the space is run down, show it describe the improvements that you would be willing to do. If the space looks great, show it off and help it lease quicker.
• Reviews: Have your tenants review what its like to be a tenant in your building. Small businesses like to hear from other small businesses and this advice has been consistently asked for by our audience.

Thanks to guest blogger Andrew Bermudez (@finditfillit), of Lee & Associates in Irvine, CA, for submitting this great post describing ways for young companies deal with a personal guaranty.

Companies that have been in business many years have a much easier time getting approved by a landlord for a lease. However, companies that are just starting out with very limited or non-existent business history have a many hurdles to overcome. One major hurdle for business owners is when a landlord asks for a personal guaranty. A personal guaranty is essentially what it sounds like, a guaranty from the person soliciting the loan/credit/contract to fulfill a contract should the entity fail to meet its obligation. However, a business owner doesn’t always have to resort to a personal guaranty when they don’t have business history.

There are actually a few options. One is providing a Letter of Credit to the landlord and the other is providing increased security deposit to secure the office lease. The main concern of the landlord is that he or she wants to feel assured that a tenant with very little rental or business history will pay the rent. That’s why they ask for personal guarantees, so if the company defaults on the rental payment, the person guarantying the lease immediately takes over the payments

Let’s look at our alternatives closer:

Letters of Credit: Plain and simple, a letter of credit is a bank’s promise to pay a certain amount that’s owed by a tenant or a borrower. Banks issue letters of credit as a way to ensure sellers that they will get paid, as long as they do what they’ve agreed to do. This is usually a more common route for small business owners or startups with not a lot of business history or revenue. This also appeases a landlord who is considering a startup business with limited revenues or credit for an office lease.

When a tenant gets a letter of credit from the bank, it basically performs the same thing a personal guarantee. If the tenant defaults on its rental payment, the bank takes over and begins to paying rent to the landlord. It is basically the same thing a personal guarantor would do, with the exception that it is a bank.

Increased Security Deposits: Landlords will forego the personal guaranty if they feel comfortable with the tenant’s business plan, plus an increased security deposit usually makes them feel comfortable that if the tenant goes out of business, they have this additional money to count on while they get the space vacated and re-leased to someone else. Another good thing about increased security deposits is that you can negotiate with the landlord certain things like having a portion of the deposit burn-off as prepaid future rent, provided you don’t miss a payment the first or second year, etc.

Things to keep in mind: Letters of credit diminish an existing line of credit, and are reflected on the contractor’s financial statement as a contingent liability. Having assets tied up are counter-productive to both the owner and contractor. The business owner’s cash flow in funding initial stages of construction and retention amounts throughout a contract term can be adversely affected when liquid assets are pledged to a bank or the bank reduces its borrowing capacity as a result of the issuance of a letter of credit. Also, increased security deposits may tie-up your starting capital and put strain on your cash-flow.

Conclusion: Always keep in mind that everything in life is negotiable, you just have to understand where both parties are coming from, and address their concerns in a way that you are able to come to a mutually beneficial agreement. Increased security deposits and letters of credit are a great thing if you are very concerned with personally guaranteeing an office lease. We hope this helps all of you getting your business off the ground, or those of you with limited credit.

As a young company, you really have a handful of choices for types of spaces to lease and where to host your server infrastructure. Below are some options and things to consider:

Executive Suites: These are usually best for start up companies that are looking for part time Team Rooms (large rooms that can fit 4-5 people) or conference room spaces to work together a few times a week. The facilities offer you an address for mail delivery, staff for answering your phone and other admin functions, faxes, copiers, and every other office convenience you can think of. They typically do not offer shared server rooms or the ability to host your server on site. There are some more tech-savvy Executive Suites popping up that might offer shared server rooms or racks, but at this time hosting elsewhere is your only option.

Shared Spaces: Shared spaces are the ideal space option for a young technology company or small business once you leave the coffee shop. You get the benefit of leveraging existing infrastructure (phone lines, furniture, etc) without spending any money up front. Many of these spaces will rent by the cube or by the office. We have found that the amount of time a start up stays in a shared environment averages about 6-7 months so it should not be viewed as a long-term home. Depending on your relationship with your sublandlord, it can be very difficult for them to allow you access to their server room. In this case, hosting elsewhere is usually favored.

Subleased Spaces: Subleasing can be the way to get the best rent deal for your start up. Most subleases make sense once you have at least 5-10 people working on site every day.  The average rental term is typically 12-18 months. Some subleases include separately cooled server rooms with back up power, but many might just be converted closets. Depending on your infrastructure needs, we have seen most companies continue to host elsewhere.  If they don’t have the existing infrastructure in place, it doesn’t make financial sense to build out the necessary infrastructure for a 12-18 month lease.

Direct spaces: These are spaces that are rented directly from the landlord and typically last for 3-5 years. Necessary server infrastructure should be disclosed or asked to be built as part of the lease negotiation. Back up power and cooling are both reasonable requests you should make of property owners and landlords. These long term lease solutions usually entail bringing your server management in house as long as you have staff willing to maintain the systems and be on call in the case of issues.

If you do decide to host your website elsewhere we can recommend Softlayer who’s pricing and support has been first class.

Map view and radius search are two great search features on Rofo. Occasionally, listing view doesn’t provide quite enough information, especially if you are not familiar with a location. This is where the map view search function can help. It allows you to target your search geographically and see a more dynamic representation of office space search results.

If you want a more focused commercial listing search, use the Rofo Radius Search tool. This allows you to display only the listings within a certain distance from an address. Want your office to be near a certain highway, public transportation or other amenity? Then search for an address near it and Rofo Radius Search will display listings within your specified distance.

To use the map view, just click on the “Map View” tab at the top of any search results page. This will take you to a map of that city and the icons represent all the buildings with listings. The Radius Search Tool is located in the left sidebar search tool. Just click on the Radius search tab at the top of the window and type in the address in an area you want to locate your office. Then those commercial spaces will be displayed in the search results for you to review.

What’s the market doing?

Where do you think we should price this availability?

These are examples of questions the Customer Service team at Rofo hear every day. We thought it might be helpful to put our tips down on paper to help provide a process for pricing your vacant space. Below are some steps and questions to ask yourself:

Step 1: Get some rough comparables: Start by searching Rofo, brokerage websites, Craigslist and any site you run into on the web for rent pricing in your city and better yet your neighborhood. Check out For Lease signs in windows near your office, warehouse, or storefront and figure out where they have priced their space. Try to get at least 5 to 10 data points and figure out roughly where your space fits from a quality perspective (low end, mid, high end).

Step 2: Decide where you want to fit in the market

You’ve got some time: If you have some time and just want to get the best deal possible, price your building towards the expensive side of the market and see what happens. If interest is tepid, try offering some moving concessions such as free rent or discounted move in costs. Wait until your patience is wearing thin and start adjusting the price towards to medium or low end of the price scale to lease it

You’re in a hurry: Look for the best comparable property from your search in Step 1 and price your space at a 10% discount. Market the property across the web and make sure you are as flexible as possible on terms. Offer commissions, free rent, or any other concessions that you commonly see in your online search.

Step 3: Test it!:  Now that you have priced the listing, start to aggressively market the space and see what happens. Network like crazy, test different advertising mediums, and see what drives the most phone calls and appointments. If you are getting a large volume of tours but not getting a lease signed, its time to lower the price.

Step 4: Analyze: If lowering the price is not working, its time to analyze if its the space/price or the market. Rofo can help provide search data for your area if that’s helpful which is a great indicator of small business demand.  If its price issue, lower the price until it leases (and you are still making some money). If its a market issue, think about creative ways to get short term tenants into your space to gather some revenue. Would someone store something in your space for a few months? Is there an event that desperately needs a location and will pay for a few weeks to rent your space? Is there a non profit that can get you a tax refund for renting to them rent free for a few months?

Hopefully some of these tips help you decide where to price your available space.

Most Common Lease Types

Triple Net (NNN)The landlord pushes through all possible expenses to a tenant. The expenses include:

• Property Taxes: If a property sells or is reassessed, a small business can take a drastic hit to their rent expense. Try to negotiate a cap if possible on the potential increase.
• Building insurance: The small business pays for the landlord’s property insurance.
• Common Area Maintenance: Everything from security guards to landscaping to re-paving gets added into the number.
• Utilities: Some spaces are separately metered where you pay for your exact PG&E usage. If not, the landlord will bill you for your prorated share (your square footage/total building square footage).
• Janitorial: A cleaning crew that cleans your space and the common areas of the building.

Industrial Gross (IG)Small Business pays for its own Utilities and Janitorial. Landlord pays for everything elseFull Service (FS)Landlord is responsible for all expenses.

Local San Jose space provider and building manager Todd Gaches shares his great experience using Rofo. Thanks for being a great Rofo user Todd!

Todd used Rofo.com to list commercial space at 2150 Tradezone Blvd., a building he manages in San Jose, California. After two months on Rofo, even in a tough market, he found two new tenants to occupy space in his building. Todd did pretty much everything he could to get his spaces viewed and tenants to tour. He definitely utilized most of the suggestions in the previous blog entry of 10 Tips on Leasing Space.

Some of the things Todd did:

• Priced his listings creatively, offered start-up companies reduced rent for the first year
• Used Rofo to distribute his listings to craigslist to get as many views as possible
• Provided pictures and videos for all spaces at 2150 Tradezone
• Divided larger spaces into smaller spaces that are more suitable for current market conditions
• Listed every space in the building as a separate listings, giving him more content to distribute
• Took advantage of Rofo’s premium listing service
• Responded to tenants quickly and professionally, often arranging tours within a few days of contact
• Was flexible with tenants on move in dates and lease terms.
• Created unique, descriptive and informative titles and descriptions for each listing

Take a look at Todd’s current office space listings on Rofo.

1. Distribute your Listing Everywhere
There are so many free distribution channels online these days that you do yourself a disservice by not using them. Listings should be distributed all over the place! Put them on craigslist, Rofo, send them to Linked in groups, Facebook groups, make a video on YouTube, tweet your listing. All these distribution channels are free, use them!

2. Pictures and Video
If a Rofo user is given the choice of a listing with pictures or without, the listing with pictures always gets more views. People want to see the space they might end up working in. If you have pictures available put them on your listing. If you don’t have any, take some! Or pay someone to do it. The pictures don’t need to be professionally done, but at least take them on a sunny day. People don’t say a picture is worth 1,000 words for nothing.

Videos take it a step further and give prospective tenants an even better sense of the space without having to be there physically. Videos are difficult to produce, so either take the time to do some research on techniques that produce good results, or hire a videographer to do it. Good looking high end spaces definitely benefit from professional looking photos or videos. Craigslist is a great place to find photographers and videographers at reasonable prices.

3. Space Size
Don’t lump 10 different spaces into one listing. If a user is searching by size how are they going to find that 1000 sf space they are looking for if it is hidden in a listing with a range of 200-2000 sf? If the space has been separated with a build out, then those spaces should each have separate listings. Plus, it increases your chances of listings views since there is more content to distribute.

In this market, smaller listing are being leased much more quickly than anything over 5,000 sf. This is due to a variety of factors, such as downsizing, subleasing and people who have been laid off starting their own businesses. Moral of the story is don’t ignore smaller tenants or neglect to market smaller spaces, even though the reward isn’t as great when compared to leasing a large space. And who know, that small tenant may end up becoming a large tenant when the economy recovers (anyone’s guess to when that will be).

4. Be Flexible on Lease Term
We are still in a recession, no matter what Bernanke says. Businesses are apprehensive about committing to a long term lease because the economic outlook is fuzzy at best. Don’t scare them away by forcing them into a 5 year lease.

Also, be very clear when the space will be available. If you are flexible on timing, say so in your listing.

5. Pricing (Price your listing and don’t hide expenses)
Be as clear and upfront as possible about price in your commercial listing. Sure, you want to leave room to negotiate, but users of Rofo rarely click on spaces that are unpriced. If you know what the expected expenses are for a certain space, add them to the description. If you want to advertise any special offers like free rent, offer them in the title or description.

Sure NNN expenses fluctuate, but you can make a pretty good estimate. Tenants don’t appreciate seeing a low rental rate and then finding out it doesn’t include $1.50 in NNN expenses on top of the base rate.

6. Price Creatively and Competitively
A tough economy forces most businesses to make decisions based on the bottom line. Pricing a listing above market rates will cause many tenants to look elsewhere. Take a look at the market and other spaces in your area on Rofo and price accordingly.

One of the most successful space providers on Rofo offers a 3 year lease wiht a low monthly rate for the first year which then scales up over the following years. This allows tenants to get into a space at a price that takes into account the tough economic environment.

7. Keep the Tenants You Have!
If a tenant is mulling the idea of leaving do everything you can to keep them in the building. In this market it will be extremely tough to find a replacement. Don’t grovel, but make some concessions and be flexible. Also, having prospective tenants tour an empty building isn’t exactly great marketing.

8. Title Listings Descriptively
Users on Rofo view listings with descriptive titles twice as much as non-descriptive titles. Think about words that tenants would identify with and are descriptive. Try to describe what you feel are the best features of the space and identify them in the title. Some good examples could be:

-High end space in high rise downtown, great natural light and four offices
-Great space with parking, ideal neighborhood for a start up
-Nice space for a non profit, most current tenants NPO’s

Listings with descriptive titles on Rofo always get more views than listings with generic titles. Think about words that they would identify with and are descriptive. Highlight the best features of the space and identify them in the title.

9. Create Comprehensive Listing Descriptions
Many Rofo users search based on specific types of space or for spaces that are targeted towards specific uses. Make sure include sublease or shared space opportunities as they are very desirable for those smaller tenants and tenants seeking short term space.

If you feel your space is a great opportunity for a non profit, start up, or professional service firm, identify this in the description. Build out, amenities, and other special features of the building should be identified as well. Make sure to describe things like available parking and nearby transportation options.

10. Be Flexible
This is more of a concluding statement about leasing in a tough economy. Be flexible and do your best to meet tenant demands. In this market, if you don’t, somebody else will.

Here at Rofo we help businesses succeed by helping them find the ideal commercial space. However, there are many other things a small business has to worry about after they find their space. Small business marketing is always a challenge and tough to quantify, especially during an economic downturn, like the one we are currently experiencing. So today we have a post from guest blogger Trynka Shineman, chief marketing officer of VistaPrint North America.  For more information on VistaPrint go to www.vistaprint.com.

Your small business is operating in a time where things are uncertain. Business coming through the door might be spotty, customers seem to be spending less, and making the bills is a much bigger struggle than it once was. But that doesn’t mean that customers aren’t out there to be had. People are still spending money, and they still need what you’re selling, just like they did a year ago. The key is doing the little things to bring in business, and that includes creative marketing. You might think that marketing in a recession is impossible because of the costs, but staying on top of mind with customers and letting them know that you’re still there for them is paramount in a down economy. Marketing to customers that you have already served, as well as working to bring in new ones can pay long term dividends through any economic downturn. It also doesn’t have to be expensive if you have a little know how and creativity.

When most people think about marketing, they think that it’s going to be too cumbersome in terms of cost to achieve any kind of results. The truth is if you use your creative mind and do things a little bit differently, you can still make a marketing impact while tightening your belt. Here are a few things you can do to keep yourself out there and in the minds of customers for a very small investment. Steps like these can be the difference between keeping your doors open and having to close up shop in tough times.

Focus on existing customers

It’s an old marketing mantra: acquiring new business costs exponentially more than retaining the customers that you already have. In difficult economic times, this rule is one that you should stick to. Keeping the customers you have is absolutely paramount. Existing customers already know your business and the level of service you provide, and can to some extent vouch for you and even recommend you. Nothing generates business like word of mouth, and referrals are still one of the biggest drivers of new customers to a business.

You shouldn’t shy away from asking for referrals – even give customers tools to make referring others to you easy. In tough times that means handing out business cards, or if you have extra budget, brochures that can be used as easy handouts.  But instead of handing someone just one business card, give them a few.  The odds of them falling into a new customer’s hand will increase.

You can even also do things to encourage repeat business with existing customers. It’s easy and cheap to print up business cards with frequent buyer boxes on the back. For every third order a customer places with you, give them a special offer. As you check off the boxes, with a special stamp or mark, the customer will know they are close to a freebie or deep discount. Make the incentive meaningful so the card with your contact information will be kept and hopefully acted upon when seen again. Giving a customer an incentive will keep you on top of mind, raise loyalty for your business, and also the chance that they will refer you to a friend.

This is a good example of how a small investment can yield big results. All you have to do is use your creativity and do things a bit differently to bring business to you.

Get a web presence

Traditional advertising spending, which has included newspaper, magazine, and other print publications continues to decline as the readership and circulation of these mediums continues to go down. More and more customers are moving online to find the products and services they are looking for. Small businesses that can’t be found online and through local searches are missing out on potential business. Getting your own web presence is also very easy. Many companies offer Website packages that are even under $5.00 per month. You can design your own site and include your products or services, your contact information, pricing, and where you are available. Oftentimes you can even sell your products online using even basic packages, taking payments online and driving additional sales.

Online search engines like Yahoo!, Google and MSN have also devised ways to increase your search results, and can help you use tools to get noticed in local searches and keyword searches. If you have extra budget, you might even want to consider making some inroads into the world of paid search marketing, which can reap big benefits when done effectively.

When you have your own Website, you have another avenue for customers to find out about you and contact you directly. You can add your web address to your traditional networking and marketing materials as another point of contact. As more and more consumers go online, they will come to expect your business to have an online web presence. If you don’t, they could very easily move on to a competitor who does.

Be creative, stay visible and keep testing!

Now more than ever you need to use your business savvy and marketing creativity to drive business and keep your customers, even if it means doing so on a shoestring budget.

Some types of marketing are relatively cheap and when done correctly, and effectively. For example, traditional direct mail can still work, especially for retaining your valuable customers. And it’s not as expensive as you think. Postcards can be ordered for a low-cost. Oftentimes you can get 100 for under $25. You could mail them out, or to save money on postage you can design one with a coupon or special offer, and either give them away at your shop to entice people to come back and buy at a later date, or put them into shipments as a box insert. When people open their package they can get a postcard with another special offer or a coupon for money off their next order, which they will encourage them to buy again.

If you haven’t yet, you can try to get visibility with signage including car door magnets, or lawn signs. Keeping visible keeps you top of mind with customers who may need your product or service.

But the one thing that you can’t stop doing is marketing. The strides you make now will sustain you through these tough times but can also be used anytime to drive business. Tried and true methods that don’t take much of an investment should be done in both good times and bad.