Exclusive: Office sharing startup Tandem raises $6.1 million
Why it matters: Companies have aggressively laid down return-to-office mandates. They haven't worked.
Context: Office vacancies in the U.S. have continued to rise since the pandemic, hitting a record high of 13.8% in the last quarter, according to CoStar data.
Companies, meanwhile, have struggled to sublet their space, with available square footage still near its all-time 2023 high.
How it works: The San Francisco-based company acts as a payments platform and broker, taking care of contracts, marketing and chasing down the rent.
Founded in 2023, Tandem started as a matching service for tenants and companies with extra space. It's since branched out with listings direct from landlords.
Tandem seeks to sweeten office sublets for renters, says CEO Rafi Sands. That could mean recommending pricing or suggesting a change in desk layouts for more privacy.
Then, taking into consideration a tenant's specific needs (a dog-free office or one with a kitchen, for example), Tandem can pair tenants up with partially occupied spaces, completely private offices, or shared spaces that are sectioned off.
Zoom out: The pandemic created a tsunami of changes in how the office real estate industry operates, empowering buyers. Leases shortened, and workers demanded more amenities.
Sands says these new, shorter-term leases aren't considered cost effective for traditional brokers that are paid a lump sum upfront for the entire lease.
That is where he sees Tandem's opportunity. The company offers one-month to two-year leases and is paid 5% to 15% per rent payment. He argues it's a better alignment of interests, as Tandem has a vested interest in making sure rent is paid.
By the numbers: Tandem has placed 200 companies in spaces since its launch a year ago and says it processes over $6 million in annual rent.
It plans to embed additional services into the platform in the future, so tenants can buy furniture or choose janitorial services through the company.
The big picture: Tandem is effectively a bet that working from home sticks around.
Stanford economist Nick Bloom, who has predicted that people will spend more time working from home, is an investor. His 2024 research found that employees who work from home twice a week are just as productive and are less likely to quit.
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