How Will Rental Transportation Impact Our Cities?

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You’re not just seeing things – rental transportation is becoming ever more of a popular thing by the day, particularly in larger metropolitan areas. Just as much as they are getting big, they’re also becoming controversial, with some cities fighting back with claims that these scooters clutter the community and are not tightly regulated enough. They’re everywhere, officials say. They’re convenient, claim the companies, in places where parking is a bear and even public transport can be challenging.

So where to from here? How will the advent of rental transportation impact our cities going forward?

SAN FRANCISCO, CA – APRIL 22, 2018: Bird, transportation start up, electric scouter parked on sidewalk

Venture Capital on Wheels

Last month, scooter startup Bird roped in some cash to the tune of $300 million. That didn’t just fall like a winged creature from the sky, by the way. It was provided as venture funding in a round led by Sequoia Capital. Sequoia’s Roelof Botha joined Bird’s board of directors as part of the transaction, which represents Bird’s second round of funding over the last few months. As a result, its $1 billion in May skyrocketed to a $2 billion valuation by the end of June. Compare that to a $300 million valuation in Mardch, and you might be getting a good idea of how hot the scooter business is these days.

Investors in this newest round include Accel, B Capital, CRV, and Sound Ventures, along with previous investors Craft Ventures, Index Ventures, and Valor. That basically represents everyone else who isn’t funding Bird’s competitor Lime, according to TechCrunch.

Scooter mania is afoot in Silicon Valley and the hearts investors in general — including Paige Craig, who has joined Bird as its vice president of business, Fortune reports. “These sorts of revolving-door fundraising processes are not entirely uncommon, especially for very hot areas of investment, though the scooter scene has exploded considerably faster than most,” the publication writes. “Bird’s round comes amid reports of a mega-round for Lime … with the company reportedly raising another $250 million … and (another competitor) Skip also raising $25 million.”

Great for the economy and the environment, yes? Possibly, but there is a flip side.

Nails in the Tires

These companies may find a less cooperative environment when it comes to civic leaders than it does within the venture-capital community. TechCrunch writes: “In San Francisco, though just a small slice of the United States metropolitan area population, the company is facing significant pushback from the local government, and scooters for the time being have been kicked off the sidewalks.”

There are a few reasons for that: first off, there have been quibbles as to how well regulated these scooters are within cities themselves, in addition to who exactly is responsible for storing and maintaining them so that they don’t pose a nuisance or even a threat to safety if abandoned in inconvenient or inappropriate areas.

However, with scooters poised to hit other cities and even Canada in the coming months, this debate is far from over … and it’s anyone’s guess who will emerge the victor.

4 Things to Look for When Hiring a Commercial Brokerage

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Young couple consultation with agent purchase rent property real estate handshake

Starting the business was the hard part. Now you are looking for a space but how do you find the right commercial building? You need a good commercial real estate brokerage but each brokerage and broker is different. How do you choose the one that’s right for you? Here are 4 things to look for:

#1: A broker that specializes in the type of commercial property that you need. One of the first things you’ll come up against when you start looking for commercial property is zoning. You may think that your office building could fit perfectly in a vacant restaurant or retail shop but is it zoned for that? Businesses that will use a building for industrial use have to find property that is zoned for industrial use just like any other type of commercial business.

Particularly if you have a unique business, for example a circus or a building that needs especially high ceilings or something, you’ll need help finding the right type of commercial property. Ask the brokerage what their agents specialize in and if any specialize in your particular business. Knowledge of the market in that industry is crucial for getting you into the right deal.

#2: A broker that represents you. Most commercial lessees have bought or leased a piece of property before, sometimes without the aid of an agent – but rarely. In a commercial real estate transaction, it’s very difficult to do without the expertise of a skilled and experienced broker.

Both parties typically have their own agent: the landlord uses a leasing agent who lists the property for sale or rent and the tenant goes with a tenant broker who negotiates the lease with the leasing agent on behalf of the tenant. But it gets a little more complicated.

Your landlord’s agent will receive at least a 3% commission on the deal and sometimes 6%. The tenant broker gets a chunk of the commission that the landlord pays. Therefore, you know going in that the leasing agent is obligated to negotiate the best deal for the landlord.

The tenant broker however, usually has no more of a stake in it than a share of the commission – acting more as a referee. And lessees can avoid paying a commission altogether since they are not obligated to use a tenant broker.

However, a tenant broker’s help is invaluable in a negotiation because of their access to comp details, expertise about the market, experience negotiating deals, not to mention securing financing, which makes hiring a broker and paying the commission worth it.

#3: A Broker that’s upfront about their fees. Even though you do not have to pay the commission as the tenant, your broker may and often charge additional fees for their services. Some work by the hour. Some by flat commission, others have flat fees for a list of services. Make sure that the brokerage that you go with is upfront about what they plan to charge you.

#4: A broker that offers the type of exclusivity arrangement that you prefer. 

Negotiating the terms of a commercial lease can take months and in some cases, years. Hiring a commercial brokerage means you’ll want assurances that they’ll stick with you through potentially long negotiations. Ask if the brokerage offers exclusive arrangements where you can retain your broker’s services for up to a year.

Hotels Look to Home-Sharing as Next Revenue Stream

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Hotels like to posit themselves as one’s home away from home, but lately this has been given a new twist. With the continued rise of home-sharing services such as Airbnb, hotels have decided to get into the arena by creating their own space in the private high-end home rental market.

“Now they see it’s the same travelers just choosing different accommodations based on the occasion or situation,” Boston University assistant professor of hospitality marketing Makarand Mody told The New York Times, adding that guests who choose a hotel for a business trip may opt for a different flavor of property such as an apartment in a unique neighborhood when it comes to personal vacations.

Moreover, Mody said, hotels are starting to see private home rental as a means of nailing down total customer travel spending. “If I’m a Marriott customer, Marriott wants me to be able to find all my lodging needs on their website, whether it’s a business trip or family reunion,” he said, adding that hotel firms are best served by being willing to provide emergent types of accommodation if that’s what customers seem to want.

Onefinestay, founded in London in 2010 and purchased by AccorHotels six years later, rents upscale accommodations such as private homes and apartments. Additionally, AccorHotels has bought Squarebreak, which provides rentals across a wide spectrum, and Travelkeys, a manager of vacation properties. With professional check-in services, around-the-clock support, and hospitality-grade cleaning and amenities, Onefinestay chief executive Javier Cedillo-Espin told The New York Times, private home rental acts as a complement to hotel services.

Major hotel chains Hyatt Hotels Corporation and Marriott International are also getting into the game, with the former taking a minority investment stake in home rental company Oasis to – as Hyatt head of transactions James Francque told the Times, “serve high-end travelers across more dimensions of their lives”. Meanwhile, Marriott is currently experimenting in London with HostMaker, a home manager. The experiment, which runs six months, groups homes with the Tribute Portfolio Hotels collection, with the homes known as the Tribute Portfolio Homes. They offer personal check0in, high safety and security standards, and industry-grade cleaning and on-call services.

One potential customer for such services is Cornell University professor Cathy Enz, who told the Times that she felt duped by an Airbnb that she booked this summer.

“The description didn’t offer a clue that there might be other people staying in the apartment,” she said. However, there were several other guests that were staying there, unbeknownst to her.

And this may be how the game-changer enters the picture – hotels start to really professionalize the trend that places like Airbnb and VRBO have begun on a more amateur level and bringing home stays up to a more industry-grade level. However, as with all other things, time will tell as to what will happen.

Grab a Bite to Eat and CoWork too? Restaurants Jump in CoWorking

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When you think about it, it makes sense to turn restaurants into CoWorking spaces. The CoWorking model emerged after 2008 when the economy was in freefall and unemployment was in the double digits in many places. Coffee shops became the place to network, start a business, do freelance and contract work – anything to make money when there were no jobs.

Multi-ethnic group of people working together on a project in cafeteria.

Those café entrepreneurs soon began launching businesses to great success. Many who left the traditional workforce have not – and likely will not – come back to the traditional office after finding success working independently. However, WeWork recognized that they also needed a place to work that was affordable and better than a coffee shop.

So WeWork began buying up office space and turning it into shared offices where different companies could lease parts of the building. These buildings though were not your standard cookie cutter cubed offices. WeWork began the work/play model that all companies are trying to replicate now.

Offices these days look more like campus hangouts with game rooms, relaxation rooms, TVs, restaurants, on-site cafes, and atypical seating arrangements for offices and desks. Then just a couple of years ago WEach Seats came up with a brilliant idea – use restaurants that are empty during the day as CoWorking spaces from 9 to 5. That idea is sprouting roots and spreading across the country.

Better than Coffee Shops

 Coffee shops are noisy and so are gyms. For much less than a membership at a CoWorking space, businesses are able to pay to use restaurants that only open for dinner all day until dinner time, to use their space for an office. That way the environment can be more controlled for noise levels with the added bonus of ambience with relaxing lighting and access to coffee and water.

Elite Café in New York is also testing the CoWorking restaurant trend. Starting at 8:30 am, the restaurant becomes a CoWorking space where the business owners are given the keys and tasked with opening the restaurant for work. Then the workers help the restaurant transition from day to night – some even help set up the tables for dinner!

Spacious is another New York based CoWorking restaurant that has a couple dozen offices in both New York and San Francisco with memberships as low as $99 per month. Bars and tables are used as desks. Private rooms are being used as conference rooms.

A Win-Win For CoWorkers and Restaurateurs

Of course, for some places, zoning will be an issue. Generally speaking, a restaurant has to be used as a restaurant but in New York, the city says it’s okay as long as the building is used primarily as a restaurant.

What businesses are noticing is how cost effective and low maintenance running a CoWorking restaurant can be. Plus there are added benefits like the possibility of interaction between coworkers as well as other businesses sharing the space.

Like running a restaurant, these spaces ask tenants questions like “how they like coffee, the milk options” and what their noise requirements are. One business decided to try this just because lunch hours were so slow. Now the business is thriving every day as a CoWorking restaurant.

Advertising is cheap. Leases provide an additional stream of income when the building would otherwise be sitting idle. This trend will likely continue to grow based on its current successes.