75 Percent of Tech Startups Don't Search for Commercial Real Estate Broker Services
RE:Tech Snap Shot Survey
New research from RE:Tech › Insight reports that more than one-forth (25 percent) of early stage tech startups search commercial real estate broker. When beginning their online search, 90 percent of tech startups directly search for office space online without a broker in mind.
The survey of more than 1,000 tech startups in New York, San Francisco, Chicago, and Boston found that there is a perception that commercial real estate brokers, specifically tenant representatives, are absent in the digital conversation. The survey found that three quarters (75 percent) of tech startups don't search for commercial real estate brokers. Half (51 percent) of tech startups surveyed believe this perception helps explain the low uptake in tenant-broker loyalty.
The research also suggests that nearly half (47 percent) of the tech startups surveyed, between five and ten employees, said they believe searching for office space is a priority but only after a funding round.
Although early stage companies between five and ten employees represented the largest segment of the survey, more than half (51 percent) of companies with 20 or more employees believe they feel ill-informed from the commercial real estate experience.
“It worries me that there are some (commercial real estate) broker that brand themselves as tech broker, but they don't know the first thing about tech," said a tech startup in New York.
With such a small percentage of commercial real estate professionals understanding what their impact on the real estate ecosystem, it is not surprising that tech startups become disconnected from commercial real estate broker.
The impending opportunity for commercial real estate brokers seems to be rooted in trust and quality of service. The RE:Tech › Insight research suggests that while commercial real estate professionals are generally interested in innovation and technology, they are less acclimated and enthused about the social science of between real estate and tech.
Additionally, while emerging sectors like real estate technology are starting to bridge the real estate and tech gap, by encouraging and embracing the digital era, more than three-quarters (75 percent) of tech startups still believe that brokers are useful during specific space searches.
Methodology: Commissioned & conducted by RE:Tech, the online research covered a total of 1,000 early and mid stage technology startups in New York, Los Angeles, San Francisco, Chicago, and Boston. The survey was conducted in Q3 2015.