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ReadyNow: Suites for Startups

SKT Marketing occupies a ReadyNow 1,700-square-foot suite in the 501 W. Broadway (Koll Center) building downtown.

Irvine Co.’s high-rises are ‘cool,’ even for Gen Yers.

By Roger Showley

Startup companies supposedly go from garages to grungy but “cool” brick warehouse lofts, thumbing their noses at sleek high-rises filled with button-down lawyers and accountants.

Well, the Irvine Company, the big owner and manager of big high-rises all over Southern California, isn’t caving to brick chic.

It operates 115 “ReadyNow” office suites in San Diego County in the very same office towers Generation Y whiz kids’ parents might frequent.

Instead of gutting the offices and letting them stand bare until a new tenant comes by, the Irvine Co. began cutting them up into 2,000-3,000-square-foot suites featuring open space plans, sleek furnishings and fancy kitchenettes.

Star Hughes
Commercial real estate broker Star Hughes, a director at Hughes Marino, has built her career representing tech companies in downtown San Diego.

Then when startup CEOs are ready to move out of the garage and into a real office space, they can set up shop within days and not have cool their computer jets for six months until tenant improvements are completed.

“Business was evolving in that time period,” added Nelson Ackerly. The Irvine Co.’s leasing manager for San Diego,

CEOs were asking how to maximize internal communication and collaboration and drive employee attraction and retention.

Through careful space planning, the suites can fit most tenants’ needs. Rachael Brown, an Irvine Co. leasing manager who helps tenants figure out their office needs, said ReadyNow suites can be occupied almost immediately.

“We can move them in within a week,” she said. “There are many ways we can get the customer turnaround very quickly.”

Of course, sometimes the drive to be trendy with the latest color
schemes stretches tenant tastes.

“Sometimes we get creative with our color scheme,” Ackerly said. “A guy comes in and says, ‘I don’t even know what chartreuse is.’ (It’s yellow/pale-green.) You don’t always hit it perfectly.”

As for generational differences, he said bosses sometimes love the upgraded finishes and open offices as much or more so than their young hirelings.

“They absolutely love these spaces and realize what they can do for them,” he said.

In a tour of several downtown ReadyNow locations, Ackerly and Brown showed off AmeriCapital Commercial’s 3,100-square-foot space on the 23rd floor of Symphony Towers.

“They make the best kitchens,” commented AmeriCapital President John Estefanos.

Interlaced, a Apple-based cloud computing company, occupies 1,700 square feet on the seventh floor of the 501 W. Broadway building, formerly called the Koll Center. Its seven employees enjoy sweeping city views, prefurnished spaces and proximity to an onsite athletic club with outdoor pool.

On the same floor is SKT Marketing, another high-tech company that handles e-mailing marketing and customer lead generation for insurance companies, coupon websites, travel-deal websites and other advertisers.

Brandon Aldridge, cofounder with fellow Georgia Tech alumnus Ballard Johnson, said they sought an open-office concept and did consider warehouse and historic warehouse spaces elsewhere downtown.

“The buildings were really cool — brick and really open — but they didn’t work for us,” Aldridge said. “They were way too big or something was off about them. The price wasn’t right. They were more expensive per square foot. I think we really focused on what was functional as opposed to what was cool.”

He said he and Johnson and their two employees keep their attention focused on their computer screens and don’t yet have to impress visitors, or amuse themselves with frills that appeal to younger workers just out of college.

“There’s no real need for us to have a cool pool table or video games,” said Aldridge, 32. “That stuff is cool but for us, that was not the top priority.”

They pay $3,500 per month for the 1,700-square-foot space that they furnished themselves; they also painted one wall with a surface suitable for dry-erase white board markers.

The fully outfitted kitchen was a bonus.

“I thought it would be something basic, not stainless steel appliances,” he said. “This was definitely a plus. They definitely beat our expectations.”

Working with Hughes Marino leasing agent Star Hughes, Aldridge and Johnson negotiated something more important — a two-year lease with a third-year option and the ability to move to another Irvine space if growth outpaces expectations.

“In case we’re booming with 20 people in here, we’ll need a new office and we have the option to do so,” Aldridge said.

Ackerly said ReadyNow rental rates aren’t that much different from standard office suites, since in both cases tenant improvement allowances or built-in features are factored into the base rent. (Hughes said all things being equal, ReadyNows tend to be slightly more affordable.)

Hughes said other office landlords also are outfitting offices in anticipation of quick leasing needs of growing companies.

“It’s a popular trend because a lot of these companies, specifically more creative tech companies, need to get in fast,” Hughes said. “They need space in a month and you can’t build out a space that quickly.”

It’s also a smart move on the part of landlords, she said.

“The market is tightening in the Class A buildings,” she said, referring to the top tier in the market.

But there’s still 2 million square feet vacant downtown, nearly 20 percent of the total, and tenants remain in the driver’s seat in many cases. No new speculative office towers have broken ground in the central business district, though several have gained regulatory approval.

“The problem is the market isn’t quite there to justify $4 to $5 per square foot (monthly rents), when we’re still doing deals in the $1.80 range.”

This article originally appeared in U-T San Diego.

Star Hughes-Gorup is a senior vice president and director at Hughes Marino, an award-winning commercial real estate firm with offices across the nation. Star is a key member of Hughes Marino’s brokerage team, where she specializes in tenant representation and building purchases. Star also makes frequent media appearances to speak on business issues from a millennial perspective, and blogs about life as a woman in a male-dominated industry at starhughesgorup.com. Contact Star at 1-844-662-6635, or star@hughesmarino.com.

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