Looking for new office space. That’s something everyone enjoys doing. It’s right up there with having to find a new apartment, and swallowing razor blades.
TheSquareFoot is changing that.
TheSquareFoot is a next generation, technology-enabled commercial real estate brokerage serving the space needs of businesses across the country by providing technology that makes it easy to search for the perfect office and a radically transparent brokerage to walk you through the leasing process.
For the record, that’s a $30 billion/year industry.
Even better: TheSquareFoot team also has deep industry expertise with the latest in technology to give clients a superlative experience. They may be NYC-based, but they’re able to help businesses search for space all across the country, facilitate interaction between brokers and clients throughout the leasing process, and automate many of the time-consuming and tedious tasks previously performed by humans.
Cofounder and CEO Jonathan Wasserstrum tells us about their funding process, and how they closed the deal.
Who were your investors and how much did you raise?
Tell us about your product – and service.
We are both a product and a service. TheSquareFoot is a web and mobile platform for tenants looking to lease office, retail or industrial space. The platform aggregates CRE listings into a central location, making it easy for clients to search for space by size, location, and property type.
We complement our listings platform with a full range of personalized brokerage services for prospective tenants. This includes everything from tour scheduling and vetting locations, to lease negotiations. Even after lease-signing, we work with local partners to make moving in, setting up and getting started a hassle free experience.
What inspired you to start the company?
We were inspired to start the company in 2011 to fill a gap in the commercial real estate market. While studying at Columbia Business School, Jonathan Wasserstrum (co-founder and CEO) received a call from his high school friend Aron Susman (co-founder and CFO), who was looking for a six-person office for his previous company. Aron made the same call to his college friend Justin Lee (co-founder and COO). As it turned out, there was no central place to start the search, and listings were often fragmented among many broker sites. We also learned that brokers were not incentivized to work with clients looking for small spaces. Through the process, the three of us realized that the industry was ill-equipped to serve small and medium sized tenants and so we started working on building TheSquareFoot to solve the problem.
How is it different?
TheSquareFoot is the only platform that offers a comprehensive online listings database for tenants to search in a central place. Also, to better cater to small to mid-size companies, TheSquareFoot’s team also works directly with tenants to set up tours, and handles all of the heavy lifting involved with finalizing the lease, moving in and setting up. We solely advocate for, and represent, tenants in the leasing process.
Which part of the city has the hottest commercial real estate market now according to your data?
In the past few years, startups have sought out spaces in Silicon Alley — aka Midtown South, which covers the area from Canal Street to 28th Street or so. However, with the growing demand and limited supply, more and more startups are beginning to venture into other areas of the city, like the Garment District and FiDi.
What market you are targeting and how big is it?
The companies that we work with have typically been those with 25-100 employees, and are looking for spaces from 2,500-10,000 sq. ft. in size. This may sound like a small market, but 75 percent of all commercial leases fall into this bucket. However, we are equipped to work with companies of all sizes, across all industries, and will continue to partner with companies as they grow into new spaces.
What’s your business model?
We get paid a commission from the landlord, just like any traditional broker would. We also receive some affiliate fees from some of our other service/product vendors. Unlike listing platforms, we do not generate revenue by selling listings, feature ads and broker leads.
What was the funding process like?
An overnight story that took a lot longer that. We had built up relationships with a lot of the groups that joined the round well in advance. Then when it was time to raise, it was a continuation of a much longer conversation. We couldn’t be happier with the people at the table with us now.
What are the biggest challenges that you faced while raising capital?
The biggest challenge we’ve faced is working in an old-fashioned industry that isn’t prone to change. Incorporating technology into the commercial real estate industry is not an easy task. We got a lot of odd stares early in our life from VCs – now many of them get it.
What factors about your business led your investors to write the check?
For one of our investors, we actually helped them find the office space that they’re in now, prior to their making the investment. The first-hand experience with our platform and service has helped to make our investors believers in our mission.
Also, the innovation in commercial real estate has been heavily focused on streamlining the backend processes for landlords and brokers, so many of our investors were excited about the way we’re rethinking the experience for tenants.
What are the milestones you plan to achieve in the next six months?
Continue to grow our team locally, and then replicate our success here in other major cities across the country and to become a national brand in commercial real estate.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
The injection of capital is just one step of many on the road to building a company. Our raise didn’t happen overnight. It came after successfully hitting successive milestones. Keep doing that. and everything will work out.
Where do you see the company going now over the near term?
We’ve been in NYC for just over two years now, since moving here for ERA. Near term, we will be focusing on continuing to grow our NYC business with an eye to more markets nationally. We are hiring for all different roles so stop on by!
In your estimation, what’s the best spot in NYC for a taking a warm weather break?
Our office is right on 23rd just an avenue over from Madison Square Park…that’s our go to.