Data Driven Real Estate Podcast #22 – Office Coworking And Flex Space Trends In 2021 With Jonathan Wasserstrum of  Squarefoot. DDRE#22

Jonathan Wasserstrum is CEO of SquareFoot, a commercial brokerage that helps companies find their next office building as well as helps owners sublease unused office space. The platform now features more than 300,000 office listings, with 5,000 new listings posted monthly. The company has executed over 1,300 leases to date and has expanded to many major metros. This week, Jonathan shares insights into the coworking and flex space trends during the pandemic and what 2021 will hold for the coworking environment. He also shares how the company leverages PivotDesk to help clients. Is 2021 a good year to jump into office coworking and flex space?

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Show Topics

00:00 The Data Driven Real Estate Podcast welcomes Jonathan Wasserstrum, CEO and co-founder of SquareFoot.

‍1:32 How did SquareFoot start?

‍02:16 Is SquareFoot a commercial brokerage or a tech company?

‍03:44 What is PivotDesk and how does it assist commercial office space owners?

‍5:37 What did coworking space look like before COVID?

‍05:52 What did WeWork prove to the office space industry about consumer need?

‍11:27 What is a flex space and how is it different from coworking?

‍14:11 Is big tech leaving office space in big cities?

‍18:22 - Trends in office real estate and commercial in 2021?

‍27:04 - What is SquareFoot's next move in the coming years?

‍29:35 - How did Jonathan started SquareFoot

‍34:08 - What does it take to become a commercial broker?

‍39:23 - What is the difference between SquareFoot and PivotDesk?

Show Transcript

Aaron Norris 00:03

Welcome back to the Data Driven Real Estate podcast episode 22. This week we have the CEO of SquareFoot, Jonathan Wasserstrum. They're based out of New York City and they assist commercial office owners into helping fill offices that people aren't using, using technology. This week we talked about the difference between coworking space and flex space. We cover COVID trends and trends in the office space industry we should be looking at in 2021 and how commercial real estate agents are leveraging technology to build relationships with clients to create a long term relationship that means a lot more business in the long term. That much more on this week's show. Welcome back to the Data Driven Real Estate podcast, the podcast for real estate professionals dedicated to driving business using data. I'm Aaron Norris with PropertyRadar, and today we've got Jonathan Wasserstrum. Jonathan, welcome to the show.

Jonathan Wasserstrum 00:50

Thanks for having me.

Aaron Norris 00:52

Um, Jonathan, how, what was your journey into commercial real estate?

Jonathan Wasserstrum 00:56

I lost a bet.

Aaron Norris 00:58

Get out of here. Really?

Jonathan Wasserstrum 00:59

No. I've always been interested in it. Now, I almost got a job doing, excuse me, real estate come out of college. Instead did consulting for a couple years was living in DC. Then 2007, which is right when the fun started last time around, start doing Capital markets work with JLL. Capital Markets been some of the most fun things to be doing. The last time the fun was. So, yeah, that's why I started kind of doing. Yeah, international real estate finance in 2007.

Aaron Norris 01:32

Okay, so, how did, how did the idea of SquareFoot come about?

Jonathan Wasserstrum 01:36

Yeah. So, yeah, I spent a few years of JLL, learned a lot, had a lot of fun plan was always to go back to business school. Did that brought me to New York. And shortly after that start, I got a call from a friend of mine who was looking for space for his last company. He had gone online to try and do that you could find office space online. You could buy an apartment online, can't find office space online. So, I decided to try and fix that. So, that was kind of the summer of 2011. In my parents attic is how we started or where we started. I've been full time since. Yeah, since 2012, when I graduated.

Aaron Norris 02:16

So, did, did SquareFoot start as a technology company or a commercial brokerage that layered on technology?

Jonathan Wasserstrum 02:21

A technology company. Actually when we first started, we were just doing the listings piece. So, you can think of like Zillow for office space was the original idea. And we pretty quickly saw that in addition to access to inventory. Everybody also wanted help with the transaction, so, we said why try and fight it, we'll be brokers. So, okay, we made tech enable brokerage, we were always a marketplace, right? The goal is always look small and medium sized businesses struggle and their search for space. If we look at residential analogues, there was the, the way of solving it just by bringing transparency with like Zillow. And then there was a way of bringing both transparency as well as transaction services, which is like a Redfin or a Compass. And that's where we find ourselves.

Aaron Norris 03:08

It was really interesting reading the website, and I tried, you know, I played with the app, booking some space. And I was really interested to know that, you know, was it was it technology as sort of an augmentation to the commercial service? Because reading on your website, you said, you know, sometimes people buy big knowing that they want to grow, and this is a great way for them to underwrite expenses before they get to completely filling up their commercial space.

Jonathan Wasserstrum 03:31

Yeah.

Aaron Norris 03:33

Well, that's a great value add service, especially for you help a client complete a commercial transaction, and then you're able to help them book the space that they're not using. That's a pretty powerful relationship play.

Jonathan Wasserstrum 03:44

Yeah. Yeah. So, maybe two years ago now, we bought a company called PivotDesk, PivotDesk  you can think of like Airbnb for office space, where you have 10,000 square feet, you're not using 2000 square feet, because that's your growth space. With PivotDesk, you can put on the platform that excess space and monetize in the short-term.

Aaron Norris 04:10

That is a, that's actually really cool to be able to do. In New York, I was playing with the, I just selected one area and I was cracking up because the range in prices range from a couple hundred dollars a square feet to 5000 per square feet.

Jonathan Wasserstrum 04:24

That about right.

Aaron Norris 04:26

New York, for those of you who've never lived in New York, I don't know if it's changed dramatically since I last lived there in '04, but you couldn't find a room, apartment to rent everything is on such extreme lockdown. Is it still that way today?

Jonathan Wasserstrum 04:43

No, I mean, I've been going, I'm calling from home today, but I've been going to the office a few times a week. I live in Westchester just outside of the city. I live in the city. I'd be in my office four and a half days a week.

Aaron Norris 04:54

Okay. So, well you mean, just I'm in strictly from finding a space to buy in or live in or rent, it was really on lockdown. It was really difficult to find anything. There was no technology at the time to help you get in. Is it still sort of behind the paywall, and you really have to go through a broker or something like square foot assisting in that?

Jonathan Wasserstrum 05:16

Yeah, sorry. lockdown means so many different things these days.

Aaron Norris 05:19

It does. And we'll get to that for sure.

Jonathan Wasserstrum 05:22

No, so with SquareFoot, you can see available inventory, right? The same way when you go to Zillow. You can see what's available to buy for a house with SquareFoot, you can see what's available to rent for office space.

Aaron Norris 05:37

All right, so, COVID. Let's talk a little bit about pre-COVID. What did the coworking space looked like before that? We work with about to go public, it was just a great time in coworking space.

Jonathan Wasserstrum 05:52

Yeah, so look, say what one wants out, WeWork, what WeWork did whenever they started and maybe 7, 8, 9 years ago, was show the world whatever, showed the industry that if you give tenants an option between a one year lease and a 10 year lease, they want the one year lease, right? Historically, if you're looking for space, where there's the two of us, or 200 of us, you had one option, which was a 10 year lease. And we were excited, wait a minute, there's another way to do that, because, and also Co-work gets sorry, WeWork gets conflated both with coworking and with flexible, right? So, all co working is flexible, not all flexible space is co working.

Aaron Norris 06:33

Okay.

Jonathan Wasserstrum  06:34

Whether it's WeWork or any other provider, there's both like, you know, if you picture in your mind's eye, like benches of desks with dogs running around a bunch of random people, and whatever the case is that everybody likes to talk about. But there's also private offices that have shorter, shorter term leases, and that, that really hit the vein. And you saw WeWork in a whole bunch of other people take advantage of that opportunity. By the way, I think that opportunities never been bigger. As we sit here today.

Aaron Norris 07:01

I make a joke, I've noticed the gratification of people on zoom calls, now that were six months in, people are moving into the garages because they're tired of being with their kids inside the house. So, I would agree with you.

Jonathan Wasserstrum 07:15

Work From Home is definitely not the future, remote work will be part of the future. I think everybody will be back in office sooner rather than later.

Aaron Norris 07:21

I think it's gonna be more of a hybrid model.

Jonathan Wasserstrum 07:25

Um, I think it depends on the company on the employee in the city, right? So, I'll use myself as an example. When I was 27 graduated business school, I guess whenever I graduated Business School, five roommates, village, exactly where we want to live. Not really conducive to having six of us home all day. If we all were, if we were all working from home, then we're all home all day where we sit the dining room table, we treated like professionals, like with jobs, like having conference calls is just not gonna happen. So, work from home is not a thing in a city like New York, I don't think, right? Because the living space isn't conducive to working space. So, then you're gonna say, great, well, you know, commute sucks, I don't want to go to the office. So, you still need office space. And so, you have something that's slightly closer to your apartment. But that doesn't have all the creature comforts of your full office. It just doesn't make sense to me. I think a lot of these will happen at the margin the way they already were, right? So, freelancers were already not working their apartments, they were working in coworking spaces, right? Me, now I use myself as an example too. And I am very careful of, of extrapolating, like my one data point to be 'great, this is the future' because it's not. But it speaks that when I said, you know, depends on the person in the city. So, in New York, I'm now 37, I just had my first kid we moved to the suburbs. Now, if I go the office two or three days a week, I can do all the in-person stuff that like needs to be in person. And then I save the commute on the other days. That doesn't mean that working from home is better. There's just everything has trade offs. And the thing when it comes to office space or anything else in life that always pisses me off is people like to talk about absolutes. So, either the office is absolutely dead. And your effort, if you own office building, or the office is the only way and you have to go to the office. The answer with everything in life is there's this gray area, and that's where the future is, and where the past has been to people who are already working. Like we already had a flexible work from home policy, which any work from home whenever you want, but it meant if you had to deal with the kid or an elderly parent or your dog was sick work from home that day, what do I care?

Aaron Norris 09:43

Yeah, you know, doing a lot of industry events specifically in commercial I was really interested in watching these companies talk about wellness, health and wellness , building into commercial buildings like this is just where you work, like what are you talking about and it seems like the co-work in a hybrid environment where people are going to be able to sort of blend the work in home and have a flexible schedule is just a perfect, it's just a perfect time. So, I would agree with you, I think it is the future. We work definitely put it on the map, there is a sense of the spaces that they were creating were quite stunning. They were beautiful. Do you see any trends as far as the features that are in demand in the coworking or the shared space?

Jonathan Wasserstrum 10:28

Um,

Aaron Norris 10:31

Is just a bench and a desk and you're good to go? Or do you have to have the kegs in the pool table?

Jonathan Wasserstrum 10:39

You know, I guess. I think with the shared stuff, it's usually location driven more than anything else. And there's also not that much variability between them, right? Like there's WeWork there's Industrious, there's Convene, I guess can be employed doesn't have much shared stuff. Actually, not. There's actually don't know that much about coworking. Right. I know a lot about flexible space. I don't know a lot of much sorry, I don't know a lot about if I just want to rent a desk somewhere, what's the best place to do that? We don't specialize in that business.

Aaron Norris 11:20

Let's better define then flexible space for sure. To make sure I have it right.

Jonathan Wasserstrum 11:25

Yeah. Sorry.

Aaron Norris 11:27

Yeah, no, sure. What, how do you find flex space?

Jonathan Wasserstrum 11:33

Shorter-term leases.

Aaron Norris 11:35

Okay.

Jonathan Wasserstrum 11:36

Leases that are almost always turnkey, like you can walk in and just bring your laptop and plug in.

Aaron Norris 11:43

And more oftentimes than not, you're going to be cohabitating with somebody who is there. And that's our primary place of business.

Jonathan Wasserstrum 11:52

On an entire floor, you'd have a whole bunch of different offices, but I have my own. My company has like PropertyRadar has their office, that I can't walk into, SquareFoot has their office that you can't walk into.

Aaron Norris 12:05

Oh, okay.

Jonathan Wasserstrum 12:06

The floor is technically the floor is shared. And they're shared amenities. Like, we share the same kitchen, and there's couches, and phone booths, and all that stuff. But we each have our own private office, now coworking and that that's like, first off, you could do that with one person, but you definitely don't have 30 people like there's not many 30 desk coworking deals, because if there's 30 of us, we don't want to be in the bullpen.

Aaron Norris 12:29

No.

Jonathan Wasserstrum 12:32

And I actually don't know the numbers, but I don't think even like with, WeWork I don't think a very big percentage of their spaces even coworking. Coworking is being defined as like, what people have in their mind's eye, which is the benches and the desks and the dogs around the cage that I was flapping my gums about.

Aaron Norris 12:52

Right. And you know, I guess the only spaces that I've been to was a little bit of a hybrid of that they had those spaces, and then it was always it had the offices around the edges. So, I guess, right, it's very different depending on where you are and what city now you guys have really spread into other markets as well. I see you're in LA and San Diego, and you're in Texas. When did that start?

Jonathan Wasserstrum 13:15

Interesting way to phrase the question. So, we technically started the business in Houston.

Aaron Norris 13:19

Oh, for some reason, I thought it really started only in New York.

Jonathan Wasserstrum 13:22

Yeah. So, we started. No, it's fine. We do, now New York is where we do most of our business. New York's the only market where we have brokers in house on staff. In other markets, including Houston, Dallas, Austin, really all the top 30 markets, we have partner brokers. When the platform sorry, taking a step back, squarefoot.com works everywhere. So, for you as a tenant looking for space in Chicago, wherever, you can go on SquareFoot and see inventory. And we can help you with the transaction. But just in Chicago, you're working with a partner broker, in New York, you work on the SquareFoot broker and started early next year in several other markets, including LA. There will be SquareFoot brokers.

Aaron Norris 14:11

Got it. Alright, so you guys are spreading your brokerage. That's not easy to do. That's a lot of work. There's a lot of headlines that are talking about big companies exiting buildings. Do you think that's gonna? I don't know. You think that's gonna be a trend? Are you seeing a lot of companies give up big square footage and come to people like you or they just ditching it and doing a hybrid model and just really rethinking how much space they're going to control?

Jonathan Wasserstrum 14:39

I think, I don't think people are leaving offices. I mean, like the big tech companies where they keep going all this inks spread, which is like Google saying, you can read everybody's going to work from home. Actually, will use Facebook as an example. Instead, everybody can remote sorry, everybody can work remote for the next year. And then like two weeks later, they sign the 700 thousand square foot deal in New York. And then a couple weeks after that, I think the deal was closing, but they're buying like a $300 million headquarters, that side of the building that used to be the headquarters for REI, somewhere in the Northwest. So, why? right?

Aaron Norris 15:20

Yeah.

Jonathan Wasserstrum 15:21

I don't think, I think you know, we're talking about right. So, people have the option to work from home, most people are not going to want to do that. So, they need to go to an office. Like we're in this, this time where like, everybody's losing their mind correctly. So, over COVID, and I need to get away from the big city. So, I'm gonna go put my feet up on the beach in Tulum. And that's probably pretty fun for six months or a year. But that's not where you're going to live for the next 20 years. And then.

Aaron Norris 15:48

Do you see any trends because of COVID where you have more on the brokerage side now you're having more customers come to you looking for maybe not the ultra dense markets, urban markets, like downtown, you know, the financial district in New York, but maybe some of the burbs in New York?

Jonathan Wasserstrum 16:06

You are seeing more activity outside of CBD. The question is that, how much that's temporary versus systemic, like Is that the new normal?

Aaron Norris 16:18

And that plays very well into the model though to have not having to sign a you know, a 10 year lease agreement. That's that's pretty perfect.

Jonathan Wasserstrum 16:24

Yeah. And ultimately, we don't care, right? So, the if you think about like when you got a Kayak, right? Kayak, all that, all that Kayak cares about is when you want to buy a plane ticket, you go to Kayak, and they can sell you and your nine buddies who are going to Tahiti for the weekend, belong weekend trip, 10 first class tickets to Tahiti. And they'll also sell you a puddle jumper from LA to San Francisco. They don't care, right and saying we don't care, right? And so, we do long term leases for big companies who want 10 years and 20,000 square feet. And we do all the way down to the two of us want to rent two desks at a WeWork.

Aaron Norris 17:03

It's a, it's funny coming from the residential space. I like cringe a little bit because I think of a tenant living in a house for a year and then how much it's going to cost for turnover and commercials just such a different experience. It makes me laugh, the data points. So, all right. You guys are in New York right now we're headed into winter. What are you experiencing in the commercial market with a potential lockdown coming on?

Jonathan Wasserstrum 17:29

Hopefully not a lockdown. I don't know. Anybody says stupid stuff. Like I'm not an epidemiologist. Look, I've been going back to the office for the last four months, a couple times a week. Each successive week I get on the train, there's more people going back to the office. Now, if all of a sudden like stop spikes, and everybody gets scared for the correct reasons to get scared, that's going to change stuff. But we're also entering a time between Thanksgiving and Christmas where generally, there's like a sprint between Thanksgiving and Christmas. And everybody puts their pencils down, come like, depending on, I don't even know what day Christmas is this year, like day of the week type of thing. But then things slow down for a couple weeks. I think pencils will go down a little quicker this year, a little earlier than usual. Be a little sprint after Thanksgiving. And then I think people are going to put pencil down a little earlier this year than they usually do.

Aaron Norris 18:22

What are you excited about in the commercial space headed into 2021? What are some of the opportunities you see ahead.

Jonathan Wasserstrum 18:27

Dude, so, I mean, look, as we sit here, I've never been more bullish on SquareFoot on a five year basis. The last five months have not been fun. The next five months are gonna be kind of annoying. But what we've seen in countless other industries is a desire and demand to use technology to make your life better.

Aaron Norris 18:47

Okay.

Jonathan Wasserstrum 18:48

And that has pent itself up in commercial real estate for a long time. pent itself up in grocery delivery for a long time until you had the catalyst. You're not ordering your grocery delivery online. You're going to the grocery store. Now you have a catalyst. Um, grocery delivery is something you need to do every day, every week, every month, whatever. So, you're already seeing that, the cats out of the bag, they're not going to go back.

Aaron Norris 19:14

Yeah, you were set up at the perfect time to really take advantage of the the catalysts, aren't you?

Jonathan Wasserstrum 19:20

Yeah, um, so, I don't look 2021 from a transaction perspective is not going to look like 2019 which was like, you know, the biggest years ever. There's a lot of pent up demand. And it all starts online. Everybody starts their search for everything online. And that, that snowball, and mixing a ton of metaphors here but that snowball has been growing every year forever.

Aaron Norris 19:44

When I look at the commercial data, the different kinds of property types are having a very different experience hospitality, retail obviously is struggling. I think one of my favorite examples that I like to share is the the mall. I think it's in Delaware, the very first American mall that's now a coworking space on the bottom or shared workspace, and it's got micro living on the second and third floor. Do you have people calling you asking about sort of deals in those categories, rethinking usage? Or getting new kinds of properties on the platform?

Jonathan Wasserstrum 20:17

Yes, so, on the, the people who own and represent those properties want to get them on the platform? I think we have few less demand for that type of stuff. But again, we're the platform, so, we don't care, right?

Aaron Norris 20:35

You, you, you, I was gonna say, Do you kick them off and say, yeah, nobody wants that. That's a terrible idea.

Jonathan Wasserstrum 20:42

This gets back to my thesis, which is like, I don't think CBD office space is going anywhere.

Aaron Norris 20:47

Okay.

Jonathan Wasserstrum 20:48

As long as I still think that's 80%, It doesn't matter what I think, right? Again, on the platform. So, I've heard out there and like, look, Airbnb doesn't care. Like when Airbnb started, they're not like, Oh, I think that people can rent out entire houses for months at a time on it, or have like jungle gyms and wherever on it. They're just the platform, they don't care. We don't care. And if I can be completely wrong, all I need to believe is that people want to rent office space somewhere. And then that.

Aaron Norris 21:18

What are the data points are you seeing? Are there any cities that are just on fire? Or is the is the headlines true that there's a mass exodus from New York and nothing's ever going to be the same?

Jonathan Wasserstrum 21:30

I, the less time somebody reads the news, the better off they'll be.

Aaron Norris 21:34

Amen to that. Yeah, I don't, I don't believe much into that and preparing for this interview trying to read as much as possible on, on in this specific commercial and the office space sector. It's really depending on the new source, it's all over the place. And what's reliable source of data. And which headline should you be paying attention to? Is there a favorite space that you like, that you think is trustworthy for commercial data?

Jonathan Wasserstrum 22:00

Yeah, SquareFoot.com. Call me anytime.

Aaron Norris 22:02

Oh, yeah. You keep track of a lot of data points as a company?

Jonathan Wasserstrum 22:06

People keep coming in. I mean, people were inquiring office space, excuse my language, effing April 1. Not as much as February 1. And but, there were still people looking for space online. I mean, it's just, it's not a good headline, which is, some people still want office space. Nobody's gonna write that headline.

Aaron Norris 22:32

It's not sexy? Of course not. Do you see any price pressure in either direction?

Jonathan Wasserstrum 22:39

Yeah, I mean, sure, pricing is off a time. Nobody really knows where pricing is, because there's a ton of supply, not enough demand at the minute. And you do have people who, look if I had a lease that was up tomorrow, I wouldn't renew it. Because I were using like, a third of the people in the office on a given day.

Aaron Norris 23:00

Right?

Jonathan Wasserstrum 23:01

Am I gonna spend three thirds on office space. And that's, that's today, today is a slightly different decision, because hopefully the vaccines are out in the next couple weeks. And I heard a stat the other day, you know, 10s of millions of people have it, have the vaccine by the first quarter of next year. So, things start looking a little different now than when we were having this conversation. April 1, April 1, everyone, correct. It was like, I don't know what the future looks like, right? No, the next year, it looks like. So, if I had to lease roll in April 1, May 1, June 1, I'm giving it up. So, that puts a lot of supply back into the market. Not to mention, there's people who were trying to sublease their space or say, 'great, we're not going to use this space for next year, let's try and get out of it'. So, all of that you start having more supply, and demand is not picking up. Sorry. It's not like growing from where you were February 1, that puts downward pricing pressure on on rents.

Aaron Norris 23:56

Okay. But with the, a lot of the great vaccine talk that has happened over the last couple of weeks. Have you noticed any trends in the data as far as people coming back and maybe being dipping their toes in the water a little bit?

Jonathan Wasserstrum 24:07

Yeah, we've closed, we closed three transactions this week.

Aaron Norris 24:11

Okay. So.

Jonathan Wasserstrum 24:12

That's a quicker pace than we have in the last few weeks.

Aaron Norris 24:18

I forgot who I was talking to this week. I Oh, I was interviewed on a podcast in New York I'm like, you should never rule New Yorkers out ,they don't play. Not going anywhere.

Jonathan Wasserstrum 24:28

The stupid thing. sorry, I shouldn't be so dismissive. If there's, there's a the company Castle that does like the billing access codes, billing access cards. They've been putting out their stats for when people are going back to the office. In most of the, so, New York's at 17%. San Francisco's, like 14%. The national average is 27%. Houston, Dallas, Austin, are all like 39 to 45%, LA's high 30. And that's like pre vaccine and go into a bunch of spaces that aren't like, weren't designed to be safe for COVID. And they are now safe for COVID. And that has been happening for months at a time and you haven't seen spikes like, you can go back to the office and a lot of places. The challenges in New York are that people again correctly. You have transit issues, right? So, not everybody wants to get on a crowded subway. So, I'm happy when I'm at the office, which is our office, the windows are open, we have air purifiers, everybody's socially distanced, it's like, pretty safe. But then somebody's like, Well, how do I get to the office? in LA, right, you said you're just outside of LA. People drive to the office, and you sit people drive to the office. So, that's not a challenge. And I believe, and apparently a lot of other people believe that working from an office is better than not working from an office. If you're trying to work, it doesn't mean that remote work is not awesome because I can play with my kid and I love my kid, I just had my first one. It's been amazing. If I play with my kid for 30 minutes in the middle day, I'm not working. And that's fine, right? And I'm the CEO, and I don't have special rules. And everybody can go play with their kids or they want, but the thing that is annoying about the conversation is not what is better or worse, right? Because there's trade offs with each, right? And I will go on that soapbox for the third time now.

Aaron Norris 26:35

Do you, do you help clients at all, as you have information on your site for small companies, entrepreneurs that are thinking about going into this kind of space? How to do it right? How to do it wrong? Do your brokers help people find the right kind of inventory?

Jonathan Wasserstrum 26:51

Yeah, all that stuff. There's a bunch of educational resources on the site. And we believe pretty strongly that we've seen people want help in the process. We have brokers kind of on call to, to guide our clients through that process.

Aaron Norris 27:04

So, what's next for you guys? Where do you plan on growing? And maybe your some technology features that you're eyeing in the years ahead?

Jonathan Wasserstrum 27:12

Yeah, new markets and can look, the goal for us has always been companies struggle in their space search transaction occupancy. So, every day we wake up and say, how do we make the lives of our clients better? And that's with technology, sometimes in service lines the other times. So, going forward and bringing that to more people, right? So, that's more markets that's continuing to innovate with stuff like PivotDesk, or FLEX by SquareFoot. More of the same, right? Which is good, we still have a ton of work to do. We also think there's a much better experience for brokers. So, we've done a bunch of work on that side, and we've been able to recruit some, some pretty top talent to support us there.

Aaron Norris 28:00

Do you find that more people come in through the service side, or through the brokerage side?

Jonathan Wasserstrum 28:06

Most people start. So, one of these big assumptions for us that's played itself out is that everybody starts their search online but wants to finish it with a broker. Right? You Google, New York, say office space, you find us, you get to see a bunch of stuff and you say, 'great, I need help now'. Right? Same thing that happens on the residential side.

Aaron Norris 28:24

Oh, yeah. It's, it's totally people driven that even, even the newer generation predominantly plan on using a realtor at some point in the, transaction, they want people.

Jonathan Wasserstrum 28:34

You want, it's not just that you want people like that. These are big transactions that you don't do very frequently, and you don't want to fuck up. Right?

Aaron Norris 28:42

Exactly. It's Yeah, it's a lot of money, especially in New York City. You don't want to mess it up. Now, did you? Maybe we can talk a little bit about the process of being in technology. And you had mentioned Angel funding and the process of growing as an entrepreneur, a technology company within the commercial space. Had you had any experience doing that? Or How did you even start?

Jonathan Wasserstrum 29:08

Yeah, none. I mean, I knew real estate, I mean, new real estate, I was in real estate before. I started my career in JLL, 2007. More on the finance side doing Capital markets work. So, I knew some stuff about real estate and know the first thing about tech, about tech, about product about, digital marketing, kind of all the things that we need to know now as we build SquareFoot has been trial by fire.

Aaron Norris 29:35

I could see that being somewhat important. Okay. How did you learn?

Jonathan Wasserstrum 29:40

Look, you learn enough to be annoying and then you make sure you hire people who know everything.

Aaron Norris 29:46

Outsource what you're not good at. Got it. When it came to angel investing, when you're when you're seeking investors, is there anything that helps you stand out that sold the concept?

Jonathan Wasserstrum 30:02

Look, when we first got started a handful of years ago, Prop tech wasn't a word.

Aaron Norris 30:09

No.

Jonathan Wasserstrum 30:10

Real estate, we were able to find a bunch of real estate people that kind of understood the pain points, they invested. And we found a couple of VCs that believed in us and the vision and the mission. So, it's a lot easier to that now, right? There's a lot more people that check both of those boxes. Yeah, we got it done.

Aaron Norris 30:35

Not coming from the technology space and real estate being a very stodgy. We're just not exactly known for being great at technology in the real estate space. So, I always enjoy interviewing technology companies in PropTech. And how'd you get started? What made you think this is even a good idea? And if it would be adopted? So many, and then she just want the easy button, and they want to work with people. They don't want to push buttons for some reason? I don't know.

Jonathan Wasserstrum 31:02

There's an easy button for everything, but it doesn't exist for everyone.

Aaron Norris 31:05

Amen to that one.

Jonathan Wasserstrum 31:06

Depends what you're looking for?

Aaron Norris 31:09

So, what's, uh, so you're going to be expanding? Are you going to move from New York City?

Jonathan Wasserstrum 31:17

Like me, personally?

Aaron Norris 31:18

Yeah.

Jonathan Wasserstrum 31:20

Not yet. I have a wife and kid, no, we're happy here. I love it here.

Aaron Norris 31:25

You said Westchester, Right?

Jonathan Wasserstrum 31:26

Yeah.

Aaron Norris 31:28

It's a great, it's not that far. How is it? How long is it about 45 minutes out of the city train ride?

Jonathan Wasserstrum 31:33

Where I mean, I'm like, if I get the express train, it's 33 minutes, 34 minutes from my station to Grand Central, it's easy. I really like to commute. At some point, I won't. I talked about it before. I don't like the cold. So, I'm not looking forward to that in the middle of February. But the commute itself is pretty easy. And I like, especially now when I'm working from home, having an hour each way is actually nice to have some time to yourself.

Aaron Norris 32:02

Just, I missed that actually living in New York City, the time on the A train going all the way back up to Washington Heights. Just unplug, read, hang out. It's nice. And it's different in LA because you have to drive a car and pay attention. It's not fun. So, when you open up your second home base, it's gonna have to be somewhere else like Florida. I don't know. I don't have any too many other questions for you. Is there any other topic that we should cover? Before we part ways today?

Jonathan Wasserstrum 32:34

You tell me?

Aaron Norris 32:36

Trying to think, we've covered urban and suburban and sounds like you guys really don't care about the property type either. Do you? Are you getting excited at any other kind of commercial, like industrial retail hospitality in the year ahead? Or do you think the vaccine will just make people go back and be like, you know what? It's office, let it be office.

Jonathan Wasserstrum 32:54

I mean, the people who needed industrial space will still need industrial space that people need retails, that will only retail people in your office. I just I have a heart maybe like I'm too conservative in my thoughts here. But I think the future looks a lot like the past, at least like the near future looks like the near past.

Aaron Norris 33:11

I'm getting a sense that people just are so desperate to go back to the way things were as soon as we can. We definitely will.

Jonathan Wasserstrum 33:19

Oh, wait wasn't like the old way wasn't perfect. But now there's remote work. So, choose your poison. Like people. I remember when I had my first job. My mom denied saying this, but I didn't love my first job. And she said, That's why they call it work. I hope everybody loves what they do. I love what I do. But that doesn't mean that like everything about is perfect all the time. And this gets back to this, like, choose my words wisely. There are people who go on Twitter or in the Wall Street Journal or wherever and say, nobody's ever gonna use an office again, like see how much happier everybody is. That's just not true. Neither of those things are true. And then they'll say, Oh, no, no, we're just in the middle of a global pandemic. So, you can't actually compare this to what it should be. Okay, fine. We'll stop caviar and everything.

Aaron Norris 34:08

Right. What do you think it's gonna take to be a really awesome commercial broker heading into 2021? I've never had we've never interviewed a commercial broker on before. What are some of the skill sets you're looking for to hire new brokers? But what do you think makes a good one?

Jonathan Wasserstrum 34:24

Well, first you work for SquareFoot whereby you want to do well by your clients and like your life. It's just like, a lot about like, you have to be hardworking. You have to be smart, creative, you have to be able to listen to people because you have clients. A lot of brokers talk instead of listen, and they're not very good brokers. You have to put your clients interest before your own, Right? Like the goal is not to get them biggest space, it's to get them the space that works best for them. To look everything in life is a long term game. So, do right by people, do right by your clients ever gonna work out all right.

Aaron Norris 35:05

All right. If, If we have people interested in learning more about the commercial becoming a commercial agent side, all that information on squarefoot.com as well.

Jonathan Wasserstrum 35:15

Yes, sir.

Aaron Norris 35:17

Very cool. Yep. There's a very simple tool on the website so, you can explore some of the cities that you guys operate in and explore some of the spaces that was pretty cool to watch. And any social media we should be following in particular, where you guys like to put stuff out.

Jonathan Wasserstrum 35:32

Twitter, LinkedIn, Instagram, lots of nice pictures of office space.

Aaron Norris 35:37

Very cool. Just curious, do you have a favorite building in New York?

Jonathan Wasserstrum 35:41

It's good question. A cliche, but probably the Flatiron Building.

Aaron Norris 35:48

Really, okay. I don't, I don't know if I've been in the Flatiron Building.

Jonathan Wasserstrum 35:54

Actually, I've never been in it. But it's just so like, if you're coming from Midtown to downtown, Broadway and fifth like split, and there's a building there. And especially like the right time of day, in the right time of year, like people are playing in Madison Square Park was actually a little triangle. That must be like 24th and 25th there that's like close to everything. But pedestrians and people are hanging out there. But you can like see all the way down 5th Avenue. And you can see all the way down Broadway. And there's a building right there. What else could you ask for? That's why nobody, whatever.

Aaron Norris 36:35

I don't know. You sound like a hardcore New Yorker, man. They've converted you you're never gonna be able to move.

Jonathan Wasserstrum 36:42

It Uh, there's a lot of. Look, I'm from Houston. I love Houston. I would love to live in Houston. I think every city this gets back to, again, it doesn't make the best headlines. But everything has pluses and minuses. There's some really amazing things about New York. There's some things that aren't great about New York. And I'll say that about most places.

Aaron Norris 37:01

Do you guys? I don't know it? Do you have? I've been asking this question a lot in the residential space. What makes a great city? And I'm sure you get that question from clients maybe looking to expand into different markets? Are there things that you're hearing right now that they're demanding? Is it? What is the quality of life? Is it access to arts and culture? Is it cheap homes? I don't know.

Jonathan Wasserstrum 37:25

It's it's all of that looked at again, sorry. I'm broken record. There's pluses and minuses, right? So, there's some things that only density can have. Right? You want 1000 restaurants, you have to be in New York City. Depends what you like, if you want to go to new restaurant every Tuesday, it's a lot harder to do that. Even in a city like Houston, and Houston has an amazing food scene. But you just don't have 100 different Italian restaurants, which is fine. Maybe, maybe you don't need 100 Italian restaurants. I don't it's not for me to say what one needs or not. But there's something and Houston's the fourth largest city, you go to like the 20th largest city, or the fifth largest, like everybody, I don't know, for Boise people go 'yeah, I'm just gonna like move to Boise', which is a lovely place. There aren't 150 restaurants there period, much less 150 different Italian restaurants. Boise has a lot of really nice things about it. Like life's about trade offs. If you want a ton of land, you want to like, you know, go golfing everyday after work or play on your ranch. Like these are all like lovely things.

Aaron Norris 38:30

So, you're not you're not getting pressured to add the sort of a features list like what's close in the neighborhood, close by and on top of the office, you know, space, obviously.

Jonathan Wasserstrum 38:40

Yes. I mean, you. We do a lot of work in New York and New York, doesn't. That's not a useful search in New York, because every block has everything you need.

Aaron Norris 38:49

That's true. That's very true. And that's more of a suburban market thing where you might not have access to Cuban food, and it's just an absolute sin. So. Okay, totally got it. All right. So, squarefoot.com I will make sure to post all the links to what you guys produce on Twitter and LinkedIn, as you said, and I really appreciate it.

Jonathan Wasserstrum 39:09

Sorry, and PivotDesk.com

Aaron Norris 39:11

Okay, I you know, what's on PivotDesk.com that's a little bit different?

Jonathan Wasserstrum 39:15

Yeah, that's the we're talking about how if I have too much space, and I put it in PivotDesk.com, that's what I put on to the PivotDesk.com.

Aaron Norris 39:23

Got it. Okay, for some reason I thought it was. So, if you have extra space, you can go there and self register.

Jonathan Wasserstrum 39:30

Yeah, or if you're looking for, by the way, not just extra space, but also the coworking providers on PivotDesk. PivotDesk is more like very small deals.

Aaron Norris 39:39

Oh, got it. So, if I'm in a market outside of LA, and I've got some extra, does, you don't care as a platform. You'll list it?

Jonathan Wasserstrum 39:47

Anywhere.

Aaron Norris 39:49

Interesting. Okay. Good to know. I'm, I might have some ideas for you. Very cool. All right. I will make sure to put both I didn't realize that it wasn't part of SquareFoot.

Jonathan Wasserstrum 39:59

It's fine. It's my job to mention it.

Aaron Norris 40:02

I'm on it. Alright, I will make sure to post, the things on that as well. Very cool. Thank you for taking your time on a Friday. I really appreciate it.

Jonathan Wasserstrum 40:08

My pleasure and have a nice weekend.

Aaron Norris 40:10

All right, see you later. Thank you for listening to the Data Driven Real Estate podcast, you can find show notes and links to some of the resources mentioned in the show at datadrivenrealestate.com. Click that join the community. And you'll be forwarded to the PropertyRadar community where you can ask questions about the current show and even see upcoming guests and ask questions there. We'd love to engage with you in the community. So, check it out. Please don't forget to like favorite, subscribe and share on your favorite platform where you're listening to the show. It helps us out a great deal. Thanks for listening and we'll see you next week.

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