Despite—or perhaps because of—the slow economy, the office vacancy rate across the nation declined slightly in the last quarter of 2012, to 17.1%, according to the real estate analysis firm Reis, Inc. This is because new office construction is virtually at a standstill in this economy, so businesses must find office space within the existing supply.
What does this mean for you? It means that you will need to be aware of some trends when finding office space for lease in this tighter market.
- Asking and effective rents grew by 0.8% in the last quarter, meaning that it could cost you more to rent that new office space than it would have last October. This is also the ninth consecutive quarter in which rents have increased, meaning that while the economy is still generally sluggish, there is some recovery for commercial real estate.
- The sharing of office space is becoming increasingly popular. Small startups and shrinking businesses are sharing space, and rent, in an effort to save money. This can work, and if you find the right fit, it can even be synergistic for complementary businesses. However, there are also pitfalls to avoid, in terms of assumptions and expectations, differing company cultures, and—most important—making sure that you get the parameters of the relationship in writing.
- Leased office space per worker continues to shrink. According to the Memphis Business Journal, “Leased office space averaged 600 square feet per worker in the 1970s, but that number had dropped to 176 square feet in 2012.” Companies continue to find efficiencies, push for collaboration, and re-engineer existing space to accommodate more workers. This trend will doubtless continue in the face of increasing rental rates.
So how can you address trends such as these when seeking leased office space? We suggest that you start with us. Our tenant representatives are very familiar with these trends, and with local office trends, which vary from one metropolitan area to another. They will help you find the best possible options for leased space in your city, at no cost to you. Contact us today to get the process started!
By: James OsgoodFlexible Workspace , Office Leasing Tips , Office Rental , Office Space , Office Space Negotiations , Tenant Representation