Not for long.
The walls of the building are still being painted, and the furniture is still being arranged at 1776, a reference to the Revolutionary War and to modern-day “disrupters.” But Harris and Burfield have had little difficulty persuading founders and would-be founders of tech start-ups to sign up for desks in the new space. Harris says that more than 75 start-ups have committed to taking space in the eight weeks since the launch. Most are tech-related, whether focusing on health, education, fashion or green energy.
“We’re only interested in helping scalable businesses,” said Harris, a start-up entrepreneur. “They don’t have to have funding, but they have to have the potential for funding.”
The incubator provides a center of gravity for the District’s tech industry. Shrinking law firms, contractors and government agencies — hallmarks of Washington real estate — have prompted other landlords to consider nontraditional tenants, such as an incubator.
The lease terms between 1776 and Clark Enterprises, majority owner of 1133 15th St. NW, are unusual. Harris and Burfield offered desks to companies willing to sign up early at $500 per reserved seat per month, or $250 for roaming desk space. A $200,000 grant from the D.C. government and corporate sponsorships will help keep costs down.
Harris would not disclose the rent that 1776 pays, but said that Clark offered a “low” rate to make the deal work. More than 200 start-ups applied, Harris said, so not only is the 12th story nearly full, but larger 1776 members will be expanding into space on the eighth, second and first stories.
Why would landlords like Clark offer such a discount?
Alex N. Lassar, a broker at Jones Lang LaSalle who helped arrange the deal, said that Clark’s prospects for the space before 1776 arrived were “nothing,” but that the building now may be branded as place to be for larger tech tenants as well. He and colleague Andrew D. O’Brien said other clients have taken notice and they expect to broker another incubator deal in the next three to four months.
“I really think there is going to be more interest in this,” O’Brien said.