Silicon Valley start-up companies are still willing to pay for high rents

A large number of American technology start-ups will be headquartered in some of the most expensive Silicon Valley areas to better collaborate with other companies and get the talent they have, according to VentureBeat, the US technology blog.

At present, San Francisco's South of Harsh (hereinafter referred to as "SoMa") and Palo Alto (Palo http://www.aliyun.com/zixun/aggregation/16350.html "> Alto is the hottest two business real estate market in Silicon Valley, favored by a large number of technology start-ups. Despite the high rents, these fledgling small companies are still "piling up" here to gain some sort of locational advantage.

The vacancy rate for commercial properties in Palo Alto and Soma has been greatly reduced. Palo Alto houses are more strained than the northern Soma, with a vacancy rate of only 5% and rents of up to $70 a year per square foot, while Soma rents up even more than some of the A-class buildings in the San Francisco Financial district, up to $40 a year per square foot.

In order to pay the rent, the start-up companies do not hesitate to control the size of their employees to cut spending. "Rents are so high that most startups are smaller than before and hiring is the hardest and most important decision," said Naval Ravikant, an angel investor at Naval Lavikent. This allows them to keep rent spending at a level similar to that of other companies and is less sensitive to price changes than ever before. ”

Sponge founder Kruttal Desseil (Krutal Desai), the American Enterprise question and answer service website, set up its first office in the Second Avenue of Soma. He says he will not move even if rents rise, as it is near VCs and other start-ups. Although many of sponge's employees come from East B., Desseil wants them to experience the Soma atmosphere and learn about the competition and work ethic of other startups.

As the Bay Area gathers a large number of technology enterprises, investors, business partners and media from other regions can visit many companies in one trip. In addition, the closure and layoffs of some businesses will bring more talent into the market.

Most technology companies are still reluctant to leave the area, despite the many opportunities for development in the cities of Soma and Palo Alto. For example, although Palo Alto has a vacancy rate of only around 5%, the vacancy rate in mountain View in the south of the region is as high as 15.9%, while the vacancy rate in the Saint-Jones (San Jose) CBD is more than 26% per cent in the south-eastern kings.

Similarly, the vacancy rate for Soma is 10%, and north of Harsh is 15%. Other areas to attract technology companies to settle down, provided a variety of preferential policies, the rent is even lower than the two markets 50% or so.

VentureBeat that 2011 will be the year of the great development of the technology industry, and the prosperity of Soma and Palo Alto will drive the development of other areas in the Bay Area.