Loopnet put together a very good info-graphic (below) on leasing vs. buying trends in commercial real estate. It is very interesting from the prospective tenant’s viewpoint as they lease new or renew space for their business or decide to buy a building to house their business. While it does us a lot of averages, it is a good overview of what has been happening recently in the commercial real estate markets in the US. In particular, over the past two years rental rates have only dropped 3% while sales prices have dropped 15%. It is my opinion that now is a good time to hit the bottom of the market in either signing a long term office space sales or buying an office building for your business. More on Lease vs. Buying office space to help decide if it would be a good or bad move for you.

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One of the big questions many office tenants wonder about is how long before their office lease expires do they need to get started on either a renewal or a relocion of their office space.  Here is a great article by our Miami Office Representative that should help answer the question.

"When should a company think about their office lease renewal?  The day after they sign their lease.  That might seem extreme, however, most folks wait too long and end up losing their leverage with their landlord.  Typically, I recommend that my clients begin their lease renewal process at least a year in advance.  There are two reasons.

First, time is your landlord’s greatest leverage.  Your landlord knows that typically over 75% of its tenants will renew their leases. Your landlord also knows exactly how long it takes to construct a new space and physically move.  If you call your landlord 60 – 30 days before your lease expires, he already won.

Second, even if you are determined to move, time slips by quickly.  A week of travel, a couple of days delay while waiting for an architect, attorney or contractor to respond
and suddenly your time line shortens.

It’s never too early to start mapping out your strategy and preparing a timeline for your renewal process.  That’s what I do every day, so let me help you level the playing field with your landlord.  If your Miami office lease is expiring in two years or less, Contact Me today."

You may also be interested in:
The Office Leasing Process and Timeline
How much office space do I need?

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Office vacancy rates nationwide fell one-tenth of a point at the end of the 3^rd quarter compared with the end of the 2^nd quarter according to REIS, a real estate research firm. "We're in the early innings of a recovery here," Reis economist Ryan Severino said.  While the vacancy rate fell, the average effective office rents increase by a factor of 5 (+.5%) from the drop in the office vacancy rate to $22.39 per square foot. This is up 1.6% from a year earlier.

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Some property owners of commercial real estate may not understand the reasoning behind why a tenant who has been renting a retail or industrial space for some time, perhaps 5 or 10 years, would want to include a commercial real estate broker tenant representative as an advisor when it is time to renew the lease, change the lease to include an expansion, or agree upon some other transaction with the landlord.

If you think about it, how is a renewal any different than an initial lease transaction? Does the commercial lease not need the same expertise, market and lease knowledge, and experience that can only be assured by engaging a professional advisor? Craig Trbovich, Sales and Leasing Advisor at Commercial Properties, Inc. commented in a LinkedIn Discussion Group, “Even if you have real estate and contract experience, it’s current market knowledge that will be invaluable. And being in the trenches every day is the only way to be current.”

Today, it is critical for top corporate executive to provide the company’s stakeholders with only the best financial decisions to ensure maximum profitability. Yet, a small business or corporate executive is not an expert on negotiating leases for commercial real estate. A professional advisor can help the tenant best determine the answer to questions such as:

·         How large should the leased facility be to need the tenant’s needs?

·         Exactly what configuration of space bets suits the business’s needs?

·         What interior improvements need to be performed and who will pay for these changes?

·         What is the best length of lease term is optimal for the tenant?

·         Should the tenant secure rights for expansion or consolidation?

·         What other options should be negotiated into the lease?

·         Can a period of free rent be rolled into the negotiations?

·         Is the landlord and building in good financial condition?

·         Should relocation be seriously considered?

The owner of the commercial real estate being leased would probably quite pleased if the leasing business does not want a tenant representative because negotiations will likely be very easy and the landlord will get options that benefit them rather than the business. Daniel Rudd, Executive Vice President and Office Broker at Colliers International states, “It is short sighted for a tenant not to have representation and the tenant is ceding the landlord an incredible amount of leverage.”  With a broker, the tenant can be assured they have someone fighting for their right and making sure their best interests are covered. 

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Los Angeles office space for lease or rent is available for every size and type of business. No matter how large or small your commercial office rental needs, you will find the perfect fit in the Los Angeles metro area. Each year, thousands of businesses take advantage of the wonderful opportunity to locate their business enterprises in this market.

The second largest U.S. city, Los Angeles is home to over 14 million people and offers a wide range of culture. With a Gross Metropolitan Product of $831 reported in 2008, LA is the third biggest economic center globally.

The past 15 quarter experienced increasing vacancy rates in commercial office space. The first quarter of 2011 has shown a drop in the vacancy rate, declining to 16%, the lowest rate since early 2006. The Greater Los Angeles area has over 214.3 million square feet (MSF) of commercial office space and the average asking rental rate is a low $2.35 per square foot.

All indicators project that Los Angeles is making a major economic comeback and while the market is still a bit soft; economic recovery is progressing slowly but steadily.  Analysts feel that the low has passed and growth can be expected in coming months.

Currently, Los Angeles has sufficient vacancies that landlords are quite flexible in working with tenants on lease negotiations. With rental rate on commercial office space at such affordable rates, this is a great time to lease Los Angeles office space. By the end of 2011, rates will likely have risen.

Unemployment in the Greater Los Angeles area continues to be quite high but is slowly falling. By mid-2012, unemployment should fall to 12% or less, according the experts. With the defense-related cuts in the aerospace market, LA will experience some impact. Current construction will add another 725,000 feet to the commercial business space.

Los Angeles with its varied culture and nearby Pacific beaches has a lot to offer workers living in this area. The weather is pleasant year round and there’s always a lot to do for fun. You can spot celebrities along the streets, visit museums, art galleries, festivals and so much more.

The residential choices for LA residents range from tiny, cozy bungalows’ to huge mansions. There are plenty of apartments and condos for lease, so people staffing your Los Angeles office will have no problem with housing.

The schools, but public and private offer great educational opportunities, and the many private  and state universities make high education easy for any of your children to find a college that suits them in the nearby areas.

Basically, with the wealth of Los Angeles commercial office space for lease, the fantastic weather, and variety of activities, LA is a great place to relocate your office, open a start up office, or expand into the area. You can find help locating the right LA office space for rent by contacting OfficeFinder, a free service to help you in your office location process.

Los Angeles Office Space Market Information

Other Los Angeles Area Market Informaion

• Anaheim Commercial Office Space
• Burbank Commercial Office Space
• Glendale Commercial Office Space
• Huntington Beach Commercial Office Space
• Irvine Commercial Office Space
• Long Beach Commercial Office Space
• Los Alamitos Commercial Office Space
• Los Altos Commercial Office Space
• Los Angeles-Airport-Century Blvd Commercial Office Space
• Los Angeles-Beverly Hills Commercial Office Space
• Los Angeles-Century City Commercial Office Space
• Los Angeles-Downtown Commercial Office Space
• Los Angeles-East Valley Commercial Office Space
• Los Angeles-Other Commercial Office Space
• Los Angeles-San Fernando Valley Commercial Office Space
• Los Angeles-South Bay Commercial Office Space
• Los Angeles-West LA Commercial Office Space
• Marina Del Rey Commercial Office Space
• Newport Beach Commercial Office Space
• North Hollywood Commercial Office Space
• Ontario-Upland-Rancho Cucamonga Commercial Office Space
• Orange County Commercial Office Space
• Orange County-Southern Commercial Office Space
• Pasadena Commercial Office Space
• Rancho Cucamonga Commercial Office Space
• Rancho Santa Margarita Commercial Office Space
• Riverside Commercial Office Space
• San Gabriel Valley-East Commercial Office Space
• Santa Barbara-Santa Maria-Lompoc Commercial Office Space
• Santa Monica-Culver City Commercial Office Space
• Sherman Oaks Commercial Office Space
• Studio CIty Commercial Office Space
• Torrance Commercial Office Space
• Valencia Commercial Office Space
• Van Nuys Commercial Office Space
• Ventura Commercial Office Space
• Ventura County-East Commercial Office Space
• Ventura County-West Commercial Office Space
• Woodland Hills Commercial Office Space