Startup companies' pressing need for office space has driven innovation in co-working spaces and incubators like never before. Yet commercial real estate often seems to be slow to respond to evolving needs of growing startups. But D.C.-based SwingSpace is eager to prove that commercial real estate's reputation for being behind the tech and startup curve doesn't always have to be true.
"We started talking a year ago when we started to see this need," said SwingSpace co-founder Richard McBride in an interview with DC Inno.
A long-time success in commercial real estate, McBride teamed up with Zak Kidd, a serial entrepreneur and founder of Dupont Studios, to turn that discussion into reality.
"There was a gap across the commercial real estate industry we wanted to fill," McBride said. "The question on everyone's mind though was the details. How do you make this work?"
The answer was to create an office space leasing platform for the D.C. area, built and informed by the same kind of commercial real estate brokers and lawyers that startups like Kinglet were founded to circumvent and transcend. Acting as a clearing house for offices with space to share and small companies in need of that space, SwingSpace fits into the idea of the sharing economy much like Airbnb. A key difference though, is that SwingSpace was created with the help of commercial real estate lawyers to make sure that all of the regulations surrounding commercial real estate are handled.
"We put it together in a collaborative way with with the industry," McBride said. "It shows others in this industry why there is so much opportunity here. It could be a single desk or a couple of thousand square-feet, but these tenants won't fall through the cracks anymore."
Office space in D.C. generally falls into the categories of co-working spaces or traditional offices, but the desire for something else has become harder to ignore. It was an issue for Kidd when searching for space for Dupont Studios, part of his journey toward partnering with McBride.
"There's lots of co-working options are happening in city to respond to the need of tenants looking for small spaces," Kidd said. "But we're unique."
At first glance, that uniqueness is questionable. SwingSpace certainly shares many similarities with the JLL-backed HiRise in terms of who it appeals to and some of its operation. Both are clearly products of people who understand real estate collaborating with people who don't understand why real estate hasn't caught up with the 21st century. Nonetheless, Kidd argues that it's the differences that matter, and that will make SwingSpace stand out, especially in the D.C. area. He points to the half a dozen or so investors, though he wouldn't name names, that SwingSpace has attracted of proof its model will stand out.
"Co-working is cool and exciting, but it's not for everyone."
"The real key difference comes from our team and investors," Kidd said. "The DNA of a company matters and they all come from the D.C. commercial real estate space. We're focused on getting traction in D.C."
There's a lot to offer, literally, when it comes to office space. According to McBride and Kidd, five million square feet, about ten percent of all office space in the D.C. market, is currently unused. A dozen of major real estate firms like Cushman & Wakefield, Transwestern, Douglas Development and McBride's own company are contributing their extra space to the platform. The plan as SwingSpace takes off in D.C. is to apply the same model in other cities although McBride and Kidd wouldn't reveal which ones are on the list just yet. The rapid mushrooming of new co-working spaces gives plenty of evidence there is figurative room for the literal space offered by SwingSpace.
"Co-working is cool and exciting, but it's not for everyone," McBride said. "We're increasing that competition and that's better for everyone."
