The future of the fledgling tech company seemed threatened the morning the co-founders arrived at work to discover the lights were off and the locks had been changed. MD Energy Advisors had sublet a small space within an occupied office – just big enough to accommodate a few desks – and diligently paid their monthly sublet rent. Unbeknownst to them, the primary tenant had ceased making payments, eventually forcing the landlord to take back the property.
When the landlord learned of MD Energy Advisors’ situation, however, he let the young company continue to use the space and promised to broker a sublet once he found a new tenant for the property.
“For young companies, a small gesture like that can be powerful,” said Phil Croskey, CEO of MD Energy Advisors. “It’s those types of efforts that are needed in commercial real estate to foster an inclusive environment that helps young startup companies.”
As Maryland’s technology industries grow and new initiatives strive to expand and diversify those industries, CRE companies have new opportunities to serve the sector and new reasons to better understand the distinctive culture, challenges and growth patterns of tech innovators.
When Delali Dzirasa founded Fearless, a digital services firm, office space at UMBC’s bwtech incubator was ideal for the facilities, connections and mentorship. A TechConnect grant from the Downtown Partnership enabled Fearless to move into a small office at Spark Baltimore and grow into a thriving member of Maryland’s tech sector.
“The downtown location of Spark has been a big draw for our employees with several living within walking distance,” Dzirasa said. “As Fearless has grown (140-plus employees), the Cordish Company and Spark has been a true partner to support our growth needs. From one small office to several floors, we are continuing to expand downtown and are currently building out space at Spark for our Hutch Accelerator program [for new digital entrepreneurs]… The real estate community plays a big part in growing our tech industry.”
Facilitating such growth can require flexible arrangements and creative solutions. Start-up tech firms are sometimes best served by turnkey facilities – furnished space where “they can walk in, lay down their laptops and get working,” Croskey said.
Startups typically aren’t situated to sign long-term leases, he added, so two-year contracts, leases that include revenue-sharing models and options to periodically obtain more office space can serve tech clients better.
“A company that has only a handful of people could see exponential change in a year and need space fit for dozens of employees,” Dzirasa said. “That flexibility is important when trying to appeal to tech companies.”
Olive, a healthcare artificial intelligence company, experienced that kind of growth spurt mid-pandemic.
“In March of 2020, Olive had roughly 250 employees, all in Columbus, Ohio,” said Damian Rintelmann, Builder in Residence at Olive. Last summer, the company selected Baltimore’s Port Covington for its first satellite office. “Fast forward to now. We are at 800 employees and roughly 70 percent of those employees are outside of Columbus.”
But tech companies, which face fierce competition for talent, don’t want just any office space.
“They want to come to a space that is inviting, that almost feels like home,” Croskey said.
And the tech innovator’s idea of “home” isn’t the stereotypical, Baby Boomer’s suburban living room. It’s hip, modern, high-tech and invigorating.
“Following over a year of working from home, there has been a drastic increase in the need for workspaces that promote wellness and offer employees a wide array of spaces to work in that promote innovation, creative and critical thinking, and instill a sense of community,” said John Hermann, Vice President of COPT. “We have also seen a rise in desire for spaces that include home-like amenity spaces with numerous seating options that allow employees to step away from their desks, have coffee with a co-worker, plug in headphones and work outdoors, or set up a meeting outside the confines of one’s office.”
Tech companies are also looking for offices that are supremely located, “both in reference to the proximity to other technology companies and to a key talent pool,” Hermann said. “Creating office buildings in which high-tech companies can cluster is key to the success of these types of companies. Ecosystems where companies can work in close proximity to one another promotes collaboration and fuels innovation. We have seen this in the Columbia Gateway Innovation District, which is home to some of the region’s and nation’s most advanced tech and cyber companies.”
Locations also need to appeal to the lifestyles and workstyle of technology professionals.
“Tech companies want vibrant communities, open spaces that help attract smart people,” Dzirasa said. “A balance of place – good retail, restaurants and office space – invite people to not just come to work but to be part of the community in which they work.”
More mixed-use developments and live-work-play environments would both support tech companies and the wider community, he added.
“The idea of a long commute to sit in an office building all day isn’t very appealing when it’s compared with working from home in the morning then patronizing a local business for lunch and then walking to an office for a meeting in the afternoon,” Dzirasa said. “Baltimore has always offered that work-life balance… This is an opportunity to make Baltimore known for the quality of life, tech and business opportunities our city and state offers.”