(Photo by Tajha Chappellet-Lanier)
When you deal in real estate, it’s good business to have an attractive piece of it yourself.
On the 7th floor of 21 Dupont Circle I’m ushered in to a conference room with floor-to-ceiling glass and panoramic views of the city below. “This is where I take people when I want to impress them,” SwingSpace COO and cofounder Zak Kidd tells me.
I can see why.
SwingSpace, which launched at the end of January, is the brain child of Kidd, a serial entrepreneur, and Richard McBride, a long-time commercial real estate broker. Essentially it’s a platform that allows landlords, and some tenants, to easily lease unused space in their offices to small companies in search of some space — perhaps only for a week, perhaps for longer. It’s like “the Airbnb of office leasing,” McBride said. And somewhat similar to the Baltimore-based Kinglet.
Kidd and McBride met at a Fosterly networking event years ago, when Kidd was in the process of searching for more space for his growing film and software development company, Dupont Studios. As it turned out, McBride had some extra space.
And not only did McBride have extra space himself, but being in the commercial real estate market he happened to know that about 5-10 percent of the roughly 470 million square feet of office space in D.C. is lying empty at any given time.
Those in the know call it “phantom space.”
This “phantom space” lies empty for a variety of reasons. On the one hand, in the commercial real estate market, five- to 10-year leases are the norm. But if you’re a growing company, let’s say a startup, a lot can change in five or 10 years. It’s easy to scale up or down your workforce depending on circumstance or need, but it is not easy to scale up or down your workspace.
So what happens is that companies lease spaces that are too big, hoping to “grow into” them. “A lot of business owners have extra space,” McBride said. “They just don’t know what to do with it.”
On the other hand, brokers are unlikely to help tenants find people to sublease unused space (even if the terms of their lease permit), because it’s just not a good return on investment. “It’s like trying to live just on bamboo shoots,” McBride explained. “Yeah, like a panda,” Kidd chimed in.
At this point I’d like to take a step back and introduce Kidd and McBride, as a team.
Kidd, you may have guessed, is the tech guy. He created the SwingSpace site, and oversees the filming of a walk-through video that’s posted with each listing. McBride is the industry guy. He’s got many connections in the commercial real estate world, with landlords, tenants and fellow brokers.
But even beyond their distinct roles, Kidd and McBride contrast and complement each other in myriad ways. Kidd is tall and warm and hospitable and even-keeled and maybe a bit cerebral, while McBride is springy and energetic and moves quickly, propelled by seemingly unstoppable enthusiasm. In the minutes we talk, he delivers a lot of great one-liners.
OK, back to SwingSpace.
Years after their initial meeting, Kidd and McBride decided that there was something missing in the commercial real estate market, and that they could use technology to solve the problem. SwingSpace was born.
It works like this: Landlords, and tenants whose leases permit, can list available space on SwingSpace for free. Potential lessors take a video tour, then apply online. Simple. The spaces are generally 2,500 square feet or less and already built out.
And SwingSpace isn’t trying to displace brokers, or anything. In fact, their listings benefit from the help McBride’s traditional commercial real estate contacts. The company is seeking to streamline a process brokers traditionally don’t do very well, and perhaps don’t want to be doing either. Recall the “living off bamboo” comment above.
On the tenant side, Kidd tells me companies that look for space on SwingSpace are between the coworking stage and the leasing their own office stage. Maybe they’ve outgrown coworking, or it’s not a good culture fit or they just want some privacy. “It’s like a bird,” McBride illustrated. “You get big enough you’ve gotta leave the nest.”
SwingSpace is now an option for spreading those proverbial wings.