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Personal Best

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Submitted By norcalhoosier
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The Problem

Since the beginning of 1995 Price Waterhouse Coopers has tracked venture capital funding of start-up companies throughout the US. Some of the different types of start-up companies range from biotechnology, medical devices, software, and media. On average about 40% of these start-up companies are located in Silicon Valley. Due to Silicon Valley being in such high demand to locate a business the cost to rent a facility (office, warehouse, etc) is very high, which requires entrepreneurs to raise additional capital that is to be allocated to renting a facility as opposed to investing it to further develop their innovative product or service. This slows down the rate of productivity and at times delays or prevents companies from introducing new products and services to the market because Venture Capitalists have to invest more money to cover high expenses not directly related to the product’s/service’s development and it takes too much time to produce.
The Sobrato Organization, a real estate development firm founded by John Sobrato has assisted in solving this problem by introducing the concept of “build to suit flex space” facilities for start-ups to rent and establish a place of operations. According to financialdictionary.com build to suit is defined as:
An agreement whereby the owner of real estate pays to construct a building to the specifications of a potential tenant. In exchange, the tenant agrees to rent both the land and the building from the owner.

Costar, a widely used database and information exchange for the commercial real estate industry throughout the US defines flex space as:
A building designed to be versatile and may be used in combination with office, research and development, quasi-retail sales, industrial processing or high tech.

The benefits to building a build to suit flex space facility are that the tenant gets to

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