Saying Farewell to the Silicon Beach House

Over a month ago I had to close the doors to the Silicon Beach House due to insufficient tenants for it to be cashflow neutral. Unfortunately I was still left holding the commercial lease for the premises until a replacement tenant could be found. I would have thought that in the current climate in Perth this wouldn’t have taken this long but it’s clear to me now that commercial leases can take quite a while to be finalised.

So, now that a replacement tenant has been found it’s time for me to reflect on what worked and what didn’t with the beach house:

What Worked

  • The open plan environment we had really worked well. Although having other people talking in the same room can be distracting for some people, most of the beach house residents found it good to have someone to talk with occasionally – this is particularly true of the sole traders who would have otherwise been working by themselves.
  • The location worked. You have to ask "how could it not?" – it’s in the heart of Perth with shops, cafes and virtually anything you need almost on the doorstep.
  • The size of the premises.  There was enough space for 10-11 people to be based comfortably in the beach house.  With a fairly basic setup of flat desks and roller chairs this seemed to work well for those in the house.


What Didn’t Work

  • The lack of commitment from those who were initially pushing the idea.  This is more of a learning lesson for myself – don’t volunteer to put your personal finances on the line to help out others unless they have shown equal commitment.  Not only did I sign up for the lease for the place, I also invested in furniture and in removing a partitioning wall to help enhance the working environment.  Sorry guys but I blame the failure of the beach house entirely on you!!!
  • The short term leases. The leases were only three month leases with a 1 month notice period.  Unfortunately with me being in Sydney now it was difficult for me to replace tenants as they vacated.  This resulted in severe under utilisation which resulted in the eventual closure of the beach house. If I was going to do this type of thing again I would put a condition in the lease that the tenant was responsible for finding a replacement in order for them to exit the lease.
  • Me moving to Sydney. This didn’t help at all in being able to find new tenants.  Again, there was no one else in the beach house with their $$$ on the line, which meant that although Dave and Myles (big thanks guys) put in quite a bit of time to promote the beach house it was never their responsibility to find new tenants.
  • The lack of parking. Well honestly, did people really expect that they were going to get free parking in the centre of the CBD as part of their $120 per week.  I think not and I’m surprised people even asked.  Part of the reason it was based in the CBD is that there is an abundance of public transport options.


Overall unfortunately the sour taste of thousands of wasted dollars means that I’m unlikely to ever undertake this style of project again.  I will however continue to be involved in the various developer communities.

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