"In this market, tech and traditional tenants are clustering along the LRT spine, as transit access becomes a key decision-making priority.”
In contrast to our focus on innovation hubs and tech ecologies, it’s interesting to think about the actual structure of the ‘ecology.’ From a real estate standpoint, the market is also booming. An in-depth understanding of how the local tech industry here in Kitchener-Waterloo and the real estate market relate to one another would be fascinating. However, given the exponential increase in property values and properties being sold for much more than asking price, I wonder if this will have any impact on future startups since leases are skyrocketing. How important is it for company offices to be located near the transit line? Will prices go up even more once the LRT system is in effect? In reference to today’s final presentation, do you think it is beneficial for tech companies to locate themselves in the K-W region to access human capital and spillovers from both universities and Conestoga college? Do you think that despite the increase in real estate prices as a whole, the pros of start ups locating themselves in the K-W region outweigh the high costs? Given that the tech companies mentioned in this article typically lease spaces that are less than 10,000 square feet, do you think that this is beneficial? Why do you think successful companies would be drawn to leasing a smaller space (other than for obvious financial reasons)?
http://m.therecord.com/news-story/7213537-tech-financing-helps-drive-demand-for-office-space-in-waterloo-region
Interest topic. The K-W area, in large part I would assume, grew due to the affordablility of the area. I know we covered in class how the area has roots in the tradition of craftsmanship, factory culture etc. and this helped get us where we are. The risks you outline could cause the ecosystem to implode if it becomes too expensive, oversaturated etc. I think the small real estate patterns you denote do help mitigate the issue somewhat...in other words, if we as a city can build small tech friendly spaces that encourage startups to engage here it may help. Once established they likely don't want to leave if they are successful.
ReplyDeleteThis is a very compelling topic, thank you for sharing! To answer the questions that you mentioned: I think the reason that most companies flock to the K-W region is for the human capital and especially the talent that the academic institutions produce. So yes I would say that it is very beneficial. I think that the benefits will outweigh the high costs and I think that the 'caliber' of the start-ups that will be seeking office space will increase and we will see start-ups that are more established (with success and all that it entails) seeking office space rather than really fresh start-ups that have little to no income from sales. Considering the small amount of office space (10,000 square feet) that start-ups are requiring I think that it is really beneficial to their operation costs but I think that the reason that only small office space is required is because thats all that they need to operate efficiently. I think that if a start-up needed more office space because of the number of employees that they have they would have the ability to financially do so. Let me know if you have other ideas because I am very intrigued to hear your thoughts.
ReplyDeleteI think this is a very interesting topic to consider! I also wonder if the real estate market will have an affect on future startups, and whether or not the LRT will have an impact on pricing. I agree with Ryan in that the reason companies choose the KW region for their location is the human capital and the talent in the area. KW has always been a great location for startup companies to flourish, and I think the affordable market has played an important role in that. It will be interesting to see if and how things will change in the region as a result of the real estate market.
ReplyDeleteit's really great.I think that the reason that only small office space is required is because thats all that they need to operate efficiently.
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