Mary Blaser joined Newmark Knight Frank in 2008 and brings to her clients more than 30 years of commercial real estate experience within Silicon Valley. She specializes in the sales and leasing of office and R&D properties.
Prior to joining the company, Ms. Blaser was vice president of marketing at ProLogis, the world’s largest owner, manager and developer of distribution facilities. She also worked as a district manager for Deutsche Bank’s RREEF Management Company, where she was responsible for overseeing the leasing, operations and property management of portfolios ranging from 1.5 to 4.0 million square feet in the Bay Area.
Ms. Blaser has represented a number of major companies, including ALOM Technologies, BD Biosciences, Ceitronics, Covad Communications Group, Finelite Inc., Konica Minolta USA, Lockheed Martin, Matsushita Kotobuki Electronics Industries Ltd., Nitto Denko America Inc., Satellite Health Care and Sony Electronics. Her extensive and diverse background as a representative of both landlords and tenants allows her to successfully manage the deal process from end to end. To her tenant clients, she brings knowledge of operating costs and expenses, budgets, tenant improvement construction, and the planning and permitting processes for cities in the Silicon Valley. To her landlord clients, Ms. Blaser brings an astute understanding of budgets, costs, vendors and competitive marketing. She can assist both tenants and landlords in setting and meeting the expectations of both parties.
Mr. Carlos Serrano-Quan is the Managing Director of Verakin Real Estate, and international real estate brokerage with offices in the San Francisco Bay Area, and serves as the Chairman of the Chinese Real Estate Association of America (CREAA) – a leading ethnic real estate industry organization in the United States . Since 2004, Carlos has helped his private clients with complex residential income and commercial real estate transactions, specializing in the San Francisco Bay Area. Carlos is very active in the Real Estate Industry serving as an advisor to several real estate tech startup companies and real estate industry associations.
In addition to his business accomplishments, Carlos proudly serves his community and the City and County of San Francisco in various positions. He was appointed by the S.F. Board of Supervisors and the Mayor as a Citizen’s Advisory Committee member of the San Francisco Department of Aging and Adult Services, and as a member of the San Francisco Department of Youth and Families Community Advisory Committee. Carlos is also very active in nonprofit organizations, serving as the Executive Director of HomeownershipSF, Community Youth Center, and the Chinese Newcomers Service Center.
Director Bill Lindemann
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Intro speaker 0:04
Welcome to Silicon Valley successes, we interview experts and entrepreneurs to give the world access to the knowledge and experience that is here in Silicon Valley. Our mission is to create opportunities for those who seek them and tell you to become the next Silicon Valley success.
Shawn Flynn 0:23
Welcome to Silicon Valley successes. So over the last few weeks, we've talked with investment bankers, we've talked with marketing experts. We even talked to a founder of an amazing start up here in Silicon Valley. Now, today we have two guests, Mary and Carlos, who work with startups to help them find office space or to help them get from their their garage or their living room to a physical location. But let I'll let them introduce themselves a little bit more. Mary, could you first introduce yourself and then Carlos? Sure.
Mary Blazer 0:56
Hi, good evening, Sean, thank you for inviting us to your show. Thank you Is my honor it Thank you. So my name is Mary blazer and I'm a commercial real estate agent. I worked for Newmark Knight Frank, formerly new Mark Cornish and carry so Cornish and carry was a boutique firm. Here in Northern California. We merged with Newmark Knight Frank. So we're now in about six continents with over 400 offices. So it's given us a bigger global platform to be able to service clients, especially those clients that are startups coming from foreign countries that need to come here in the Bay Area and establish you know, working opportunities for themselves for their for their startup businesses. And I've enjoyed a 30 plus career and my specialty is the leasing and sales of office and industrial properties here in Silicon Valley. Wow. Carlos, please introduce yourself.
Carlos Serreno-Quan 1:45
Thank you, Shauna. My name is Carlos, Toronto corn. I'm the managing director of American real estate. And we were formed last year with the partnership between very joy holdings as well as AGI capital. And so we specialize in leasing tenant representation. And as long as well as landlord representation. We have offices in Berlin game, Palo Alto and San Francisco as well. Okay,
Shawn Flynn 2:07
so to start, let's have a quick question for you. So what issues do startups face when they're looking for office space?
Mary Blazer 2:17
Well, some of their issues are that they, it's hard for them to figure out how fast they're potentially going to be growing. So finding that right size space is initially a concern for them, okay, you know, you could lease a space that potentially is too small, that doesn't have enough breakout rooms, you create more noise, and then it you know, it creates some inefficiencies with how you flow in that space. Or you could take a space that's potentially too large, and then you've just got all these overhead costs that you're paying for, that you don't necessarily need. So I think finding that right sized space for startups and assisting them in that effort is, is something that's pretty critical for a startup company. So with that, right, say, space, say, at a team of four people are six people right now. And I came to you is that too early to talk to someone? Or is that the right time? Or once you that first conversation v that time? Is it is it an important time? Because there are small spaces that can still accommodate that team, that size team of people, okay, and then it's just determining from that point on, at what future point are you going to double your size or triple your size. So when you're looking for space, you might want to be thinking about how long of a term you're going to be in that one first space. Okay, that'll last you through that period of time, and then moving on to the next level. So with that,
Shawn Flynn 3:39
I'm just going to keep going with this one question just because there's so much to it from one term to the next is that a normal six month one year how flexible is that
Mary Blazer 3:50
so for some of the like Regis centers, executive suites, places where you can rent on a month to month basis, you could probably do something short term most landlords and typical office space, I'd say that the minimum terms are about a year, generally, they would like a longer term lease. But if they've got the ability to move and expand tenants within their building or their project, then some landlords are typically a little bit more flexible than others. It just depends on the size.
But as far as term, it just really depends too. On which landlord in the valley you're dealing with.
So with the landlord in the valley, be flexible if they know your startup or not.
Oh, yes, they would. Sure. And,
Shawn Flynn 4:32
Carlos, if you had this same experience when with issues that that startups might face when, when looking for an office.
Carlos Serreno-Quan 4:39
Sure, in my experience, it's really about the right location to attract the right talent, as well as being a facility where investors may be as well. So for example, I know that talent acquisition for startups as is really challenging. And so they need to be an area where transportation tools location is actually very attractive to allow other future employees or current founders and teams of that nature because have to get together frequently. So it could be something near bar something the Caltrain it could be anywhere from San Francisco to Palo Alto. But it has to be somewhere where it's easily accessible, or some something like that, but also to be an area where their investors can use the go to, so we're ready to pitch events, etc. and that sort of thing is a really big consideration as well.
Shawn Flynn 5:29
So when you're showing potential locations to start up, do you actually tell them that they say this offices that are available and you know, nearby are frequent pitch events nearby, or these VCs are these Angel groups. That's why this office space might be a good fit for you.
Carlos Serreno-Quan 5:47
Yeah, I think that's where we can be helpful at brokers to the businesses as well as, you know, the type of business that they may have. It could be a blockchain, it could be a real estate tech startup, it could be anything other startups that we are familiar with the community, and we know, our own group of investors might be interested as well. And they get excited when they hear that, that we know what their needs are.
Mary Blazer 6:09
Yes. And one of the things our firm can do is we can, we can tour them in the markets. But we can also show them aerial maps of what companies are located in the areas where they would are potentially looking to go. So, you know, if they're trying to interview or recruit people, potentially, from other competitive companies, they'll know where they'd like to potentially be located.
Shawn Flynn 6:29
So if I was a startup, and I knew I wanted engineers from maybe Google or Facebook, I would come to you and you go, Oh, well, if you want to recruit from these companies, a good office building potential might be in this area, because they're already used to making that commute every day and go into your office wouldn't be
Mary Blazer 6:47
right, that's nice. I've never heard that before. And also, they're looking at the demographics to of where their employees technically live, okay? And how close they're going to need to be in proximity to where they want to work. So that's another absolutely important we can do, we can run demographic studies for them by zip code, you know, they give me their, the weather each of their employees live, we can kind of map it out for them. So they can also from another perspective, try to find a location that suits everyone's needs.
Shawn Flynn 7:16
So I have six employees, for example, and I would come to you and go, we need to move out of my apartment to an actual location right now, you would tell me, you know, this is where your next hires might come from these these these companies, this is where your current employees live. And this would be the best commuting routes? What other information could you give me?
Carlos Serreno-Quan 7:37
Well, I mean, what I would really give them as help them prepare for potential space that they're interested in, they may not know that it requires financial qualifications, as well as a business plan, as well as a personal guarantee, because Atlanta are looking for a tenant as really qualified and fits in their building. So it's a lot of preparation work that you have to do with a startup and they might not be aware of they can do you think they might be just like signing a residential lease, but it's quite different is more of a business relationship, and there's a fit with the building as well.
Shawn Flynn 8:10
So we'll go into more detail about that is Mary, you'd like to add, because I really have no idea about this business relationship, please tell me more about it.
Mary Blazer 8:18
Well, from a business relationship perspective, you know, we have our fellow brokers, and that we do a lot of work with, we have the ownership of buildings that we have relationships with, and other, you know, real estate professionals. So we have sort of this inside track on what's happening, and we're on the pulse of the market. So when these companies come along, and they're looking for space, we know, for example, a space that may have just been vacated, or something that's maybe going to come to the market that's not technically being marketed and available to just the mass the public. And that's because, you know, the owner of that building, or the landlord, and, you know, the last person's least and six months from now, a year from now, right. So we're, you know, that's our job to be real estate, to know what's going on in the market, so that we can service these clients to the best of our ability. And I think that definitely helps to add value. Because when you think about these, these decision makers of these companies, and how much time they're trying to put into running their startup, you know, it's a lot of time and communication and trying to identify properties in the market. So if you're reaching out to professionals like Carlos and I, to help them identify the properties that could be well located in suited and help them with understanding all these business points that need to be negotiated in disgust, it'll help save them a lot of time and effort now, is the difference from a startup coming from another state to Silicon Valley versus another country to Silicon Valley of what types of problems or situations do the different startups depending on where they come from face when they come to Silicon Valley, I think is pretty much the same thing, I think, is the expectation of
Carlos Serreno-Quan 9:54
what the land or requires of them, I mean, a lot of them, for example, I experienced with folks that are doing their own. So they have big, large propellers, or some of them are doing robotics that needs space where they can go down the aisle and these type of things, and they don't know what locations will allow that kind of a usage. So there's certain type of usage, for example, PCR production, production, distribution repair, or some of the industrial kind of zoning and warehouses that can actually have offices in there as well. So the these are the type of usage is that some of these startups will require and they're your typical office won't have that type of availability. So
Mary Blazer 10:33
right. So for example, a client like that might go into an r amp D facility, as opposed to an office ability was
that in research and development, right.
Mary Blazer 10:40
And so in those types of buildings, you're going to have power requirements that can be different than your typical office building. So with their technology, they may need, for example, some higher amperage in power 400 amps, or up to 1000, and it just depends, but they need but that's, you know, we need to ask those questions and, and help them figure out what their needs are, from that perspective. Clear, high rise, building high ceilings, roll up doors and sort of knock on doors for deliveries.
Shawn Flynn 11:13
So how much do you actually have to know of the startup? What they're doing their product, what they're working on, in order to give them the best option for them?
Carlos Serreno-Quan 11:22
Well, we that's a really good question, actually. Because what I do, Mary is, I might actually go visit them first, make sure to qualify, first of all, and they say who they are, they say, because I will, on behalf of the land or the owner of the building, I actually have to go to a site visit a word are currently located, they have a current location, understand your operation and see if it's a fit for them, or what interested me
so I'm sorry, I just
Shawn Flynn 11:50
Oh, not a problem as so. So back to the startups themselves, when you interview them? How do you know that they're financially qualified or fit for that for that landlord? Is it they're about to raise their next round of funding? They have money in the bank, or they're talking to investors kind of what stages Could they be at for them to actually have a serious conversation? And do you turn any companies down
Mary Blazer 12:17
typically, I tell my clients that these landlords are looking for a profit loss sheet, a balance sheet and income statement for the last three months, usually for the last two years, but they don't have two years worth of that kind of information. But whatever they can provide. So they're angel investing who their backers are okay, if some big name backers, or an angel that would VCs, that helps a lot, right. And also, if they have money in the bank, so that they can show they've got so much cash in a bank account that they can support landlord just want to make sure they're going to pay their rent, or whatever obligation of term that they have. Because you know, a lot of startups to burn through cash, they've got a high burn rate. So the landlord's just want to make sure that because they're investing in that company, when you think about it, yeah, it's, you know, it's money that they're generating every month. And so they want to make sure they're going to pay their bills. And then there's personal guarantees that are often asked for, okay, from startups. So with that personal guarantee, see, I'm the founder of the company is it me and my whole team that's guaranteed Is it just me and the other co founders, the what's the guarantee on it's usually a personal guarantee, it could be a person who is one of the corporate officers who would be willing to guarantee the least people are not always that inclined to want to do that, and put their own assets on the line. So sometimes they'll ask for a letter of credit, or an increased security deposit is another option, right. So, you know,
Shawn Flynn 13:41
they really want to just try to cover upfront costs, like commissions, tenant improvements, any sort of concessions that have been given to these startup companies to tell you about the tenant improvements exactly what that is. And before answering that, so on to make another statement. If you want more information on this or any the other topics we've covered, please visit us at Silicon Valley successes.com once you can Silicon Valley successes calm right back these what's tenant improvements,
Carlos Serreno-Quan 14:09
a tenant proof is really the the criteria and the preparation of the space for the channel to operate in their own business operations. So it's a matter of for example putting up walls putting up offices conference rooms, it could be a kitchen at it could be something like that. So it really up to the specs and design of the tenant and then that will be negotiated with the land or who pays for what how much of free rented they can get. And that's what this is where the brokerage come in. And you can negotiate that on behalf of the tenant and landlord.
So the broker come in and you go to the broker, listen, I want one month free rent or three months for your and what's common and what areas can a broker negotiate for the landlord or the tenant?
Mary Blazer 14:54
Well, in a tight market where the rents are really high, and it's very competitive, landlords can call the shots if they don't want to give free rent. They don't have to give free rent in a softer market, I would say one month of free rent for every, you know, two years or two months free rent for a three to five year type term.
Shawn Flynn 15:11
But that would be really saying a corporation that right? I mean, just a start up what's a typical startup? least six months? A year? Two years?
I would say about a year,
yes, about 12 months, okay.
Shawn Flynn 15:21
And if, say, 11 months in the startup goes, you know, we're have to file for bankruptcy. Sorry, that personal gain or tea, I really have no money because I spent all the startup what happens that?
Mary Blazer 15:34
Well, we as brokers can help to market the space and try to get another tenant to backfill and take that obligation off of the tenant. Technically, they're still obligated until we can, you know, relate the space, we can tell the landlord landlord may have another tenant because they do a lot of marketing as well. Some of them they may have someone might want to just backfill that space. So it just really getting the word out and trying to help these people and and make it this pain much as possible. Do landlords every go to tenants and go listen, I have someone else that wants to pay more than what you guys are currently paying. I'll give you some money if you leave.
Carlos Serreno-Quan 16:08
That's happened. It couldn't happen. Yeah, a lot of times, what happens now is that, you know, the climate is very kind of like, unpredictable. So you have a lot of tenants that are either downsizing or they're expanding. And so they need new space, it may want to abandon the current space, so we can help sublease that space as well. And if they need to leave early, then we can help them something excess space as well. So it really determines a lot of communication between us brokers and the tenants and allowed to Mike Phillips and as well. So how often should the tenant be talking to you every three, four months or monthly, I recommend it because I put a client in a space back in October, and by May of the phone year, we were looking for a new space, then they had signed a one year lease obligation. So every couple months is a good idea to be just on them, checking them.
Shawn Flynn 16:57
So you say your broker is actually part of it, your team, almost like your lawyer, your accountant, bookkeeper, that one guy always they're looking for that next operator space for you?
Mary Blazer 17:07
Well, yeah, it's all about relationships. And you want to start early on having these relationships that hopefully build into longer future relationships and growth that you're helping them to achieve. Because, you know, I've had a client that started small and about 1200 square feet, they, I then expanded them to like 5000 square feet, then they moved 15,000 now they're in 30,000, it's just a great success story. So you love when you can stay on that path with them and be in touch with them and and help them in their growth especially with
the amount of people that they're bringing on in their space needs to drastically change when they get to those levels of needing bigger space to brokers also make other introductions to uh, maybe to investors or potential business partners or to brokers ever reached out to their personal network and say, Hey, I have this startup here, I'd like to introduce you to is that ever happened?
Carlos Serreno-Quan 17:57
Yeah, that's a good, that's a great question. Actually, for me, I do. Because I take an interest in the tenant, I take an interest in a company because I've learned a lot through the process of helping them qualify. And then in their process, I actually asked them, you guys need help with funding, when's your next event would you like to be close to another type of 10 or type of investors because we'll know who's in a building or who's nearby. And so we, I like to connect them in and make sure that they're also successful in their business. Hopefully, we play a role in that because a successful 10 that will be a successful future business and they might grow and we can help them there as well. And then the lender will also help out because they will know that the they want that tenant to be financially successful. So that it can, you know, grow and take care of your property.
So can attend it in negotiation ever asked say, Hey, we don't have money, we want to give you equity in our company. Does that come up a lot
that came up in the early 90s when I was working for prologue, just and some other you know,
tell me a story there.
Mary Blazer 18:58
No, I just know that they that that's been a discussion it's not something that they would always do. Okay. But potentially that came up quite a bit.
Yeah, back is that happened now that are you said back in Well, the.com time But
Mary Blazer 19:14
yeah, I think landlords a little more cautious because they you know, they could have been burned in the past with a lot of that. And they may have new guidelines to that that's not really their core business. So they should just be doing what they're supposed to be doing and not that investing necessarily in their tenants business, but I know that some do
Carlos Serreno-Quan 19:32
so sir. Some you got to understand there's some that are smaller landlords that may take a risk big land or to institutional guys have multiple tenants in your office building, that probably is not going to happen.
Shawn Flynn 19:43
Interested? So some of our viewers are overseas and countries such as China and Korea all over the world. How's it different for them? When they come to Silicon Valley? What questions should they be asking? I mean, they don't have a US credit history. They may not have a credit history at all, Jenna, where they're from? How does How did they go about finding a location?
Mary Blazer 20:05
Well, they partner up with folks like us, who can help us help identify where they would like to be in this is after we find out you know more about them and more details about them. But, you know,
I have a group I'm working with right now. And it's just investigation as you go day by day, you know, because you're sometimes you're dealing with them on a whole different time frame, you know, like, I'm, I'm having conference calls at nine o'clock at night. Yeah. Which is like, their, their morning or Yeah, so you just try to accommodate and figure out what they're looking for. And when they're here, ask them as many questions as you possibly can on on, you know, how are you? How are you established already? Are you a California Corporation? Have you incorporated yet? What's the process that you're going about right now, in terms of how you're going to finance this operation? And
Shawn Flynn 21:00
so if I'm a company from will say, Ukraine from unit city from mats area, who was a guest earlier, and I come to Silicon Valley from day one, I found a location How long does it take from when I when I decide to location, or when I connect with you to start looking for a location to sign a lease to be able to move in? Can this be done in a month? Or is it a lot longer, lot shorter?
Carlos Serreno-Quan 21:27
Yeah, I don't think a month will do it, in my opinion, depending on how ready the company is overseas. Because I work with a lot of companies overseas, that are just not aware of what the due diligence requirement from a landlord to a tenant or and allows a lot of landlords, you know, since you're coming from overseas, that level of trust is not as strong as a local company.
Mary Blazer 21:48
And it takes them time because they're traveling back and forth. And when they're here, they're seeing things, but then they go back, and then they're reporting their directors. And then maybe those folks need to come out and see the property. And there's, there's a lot of back and forth, back and forth, that initially could happen in the first two to three months of helping this client even identify space. So you'd recommend an overseas founder, one, one of the people on his team to come to Silicon Valley, meet a broker, build that relationship on maybe trip one trip to come see a few locations, Chip number numbers, three, kind of make the decision and then trip for I mean, that's, that's normal. That's normal.
Yeah, and I would say anywhere from two to six months. But I, you know, it depends how large of a company you're dealing with to. And sometimes you can find a space immediately if it's, you know,
Shawn Flynn 22:35
if maybe smaller space, and you've got your own company, 10 employees, 20 employees, and we've got plenty of options may not take too long, you get into some bigger size requirements. And then, you know, you want to give yourself a longer window, do anyone from overseas come here with completely off the wall expectations? You know, I want this office, I'll pay this much you go I'm sorry, that's the surprise future
Do you ever come across that
Carlos Serreno-Quan 23:02
I do. I mean, like, there's not way off. But it's more like, you know, the send somebody else that's not really in real estate or tenant space acquisition environment, they may send somebody from marketing or something, and they may not know what the landlord expecting or how to work with a broker. So there's a lot of back and forth, and we try to help them prepare by telling them that we need access, or the landlord needs to look at your financials and your business plan, and that sort of thing. And so they have to be ready to provide that kind of material
Shawn Flynn 23:36
is there any like vocabulary, sedation, no price per square foot, or things like that, that they know before meeting you could save a lot of time.
Mary Blazer 23:48
We know a lot of time we're educating them on on these buzzwords like ti what's, you know, tenant improvement, and sometimes we just say, you know, what kind of tip you looking for. And they don't the tenant improvement, that's important because one client of mine wanted a lab within their
part of their r&d operation. So then I was asking them about the kind of power that they might be, you know, power needs that they might have. And he he wasn't so sure about that. So that's pretty critical. Because if you're going to do a lot have a lab component, you may need 200 to 400 amps of power in your space. So it's important because then now he'll go back and ask the key questions that he needs to be able to do you ever give potential tenants a list of questions
you say, answer all these before the next time we talk? Yeah,
Shawn Flynn 24:38
What what uh, what advice would you give a founder out there that hasn't found any office space yet that's still working at home on when they first talked to landlords or what they should be thinking of other than what we've already talked about. So far, we've talked about location of your employees, we've talked about transportation, we've talked about lease options. We've talked about talking to brokers who can make introductions, this is all amazing. what's what's more to to know.
Mary Blazer 25:05
Another thing that I like to do is recommend a good business attorney, because, as you know, we're here to help with this lease process from start to finish. But when you get into the business points of the lease agreement on what you've negotiated in terms, there's also the boilerplate language within the Leafs and if you're, if you know, a foreign company company here, you're not really familiar with a lot of leafs language, okay, highly advise that they use business attorneys to review this documentation because we're not attorneys, you know, we help negotiate these deals but to protect them, that's just an important part. Do you have a business attorney Do you need a reference to a good local real estate attorney Have you see a with it because they didn't have an attorney got in some hot water later on,
not too much hot water, but
Carlos Serreno-Quan 25:53
not really hot water. But it's just something that they you know, it's not easy language for them to review on their own. Okay. And so they should have a second pair of eyes to take a look at that and what their needs are.
Shawn Flynn 26:03
And Carlos would advice would you give to a founder
before you met them, you know, any information you wish to pass on to someone,
Carlos Serreno-Quan 26:14
as far as leases are concerned, is mostly big bosses to think about their distributed strategic location where they want to be and it fits your needs. I mean, that's the bottom line. I mean, I think that they allow them made think that they need a certain thing, but a lot of times, it's better for them to be in a shared environment, or maybe find somebody that has a complimentary type of business with them, that they can go in together, there might provide some synergy to them. And you can make those kind of introductions as well.
Shawn Flynn 26:43
That's great. And married before time runs out. Yes, please talk about how people can contact you and a little brief overview of yourself one more time.
Mary Blazer 26:52
Sure. So again, Mary blazer. I'm with Newmark Knight Frank and folks can reach me at my email which is m blazer at n gK f.com
Carlos Serreno-Quan 27:02
we have our company website WWW dot NGK f.com as well. Carlos Carlos Toronto climb one number 415-608-8409 and we have dedicated tenant representation agents in my firm.
Shawn Flynn 27:17
That's great. So Mary Carlos, I want to thank you guys for taking the time coming here on Silicon Valley successes and people at home. For further information, please visit our website. Silicon Valley successes comm check us out on YouTube, Facebook, and all the other social media and we hope that you got a lot out of this. And in the future, we're going to have more guests from investment bankers, bookkeepers, we have some amazing founders coming up in the next few episodes. So we look forward to to your future attendance. And thank you again for taking the time to to to watch.
Intro speaker 27:55
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