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Entries Tagged as 'Office Rental'

NAR Predicting Improvement in Office Space Market & Increasing Rents

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The NAR quarterly forecast reports that all commercial real estate sectors are on the upswing. Their predictions include that the US office space vacancy will decline by 0.4% to 16% by the 1st quarter 2013. According to the report, office rents are expected to rise by 1.9 percent this year and 2.4 percent in 2013, with net absorption predicted to hit 20.1 million in 2012 and 28.1 million next year. More...

Washington, DC, currently has the lowest office space vacancy rate at 9.5%, with New York City in second place at 10% and, surprisingly, New Orleans at 12.4%. More Office Space Market Information.

What this means to office tenants is that now is the time to lock in long term rental rates to ensure you benefit from the bottom of the market. The best way to do so is by engaging the services of an office tenant representative who can show you how to take advantage of the current low office rental rates. There is no cost to tenants to obtain the services of a tenant rep, so there is no reason not to investigate what they can do for you. It is a no lose proposition.

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Lease Negotiations , Manhattan Office Space , New York Office Space , Office Rental , Office Space Negotiations , Office Vacancy Rate , Tenant Representation , Washington DC Office Space

OfficeBroker Changing to a Subscription Model

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OfficeBroker.com, one of the top 3 executive suite web brokers, has recently announced that they are changing from a commisson based model to a subscription model. According to an email received by one of our Executive Suite members:

"In January 2012 officebroker.com will be changing the way in which it markets office space, removing the commission structure and replacing it with a simple monthly subscription for listing your office building(s) on our website.

This new subscription model will result in your direct contact details being added to officebroker.com. Instead of charging a commission, you will instead pay just $75 per building location listed per month.

Summary of Changes:

·     Client will be able to contact YOU directly from our website!!  Your contact details will be added to each of your building locations listed on officebroker.com enabling you to get their details before your competitors would!

·     Additionally, any inquiries officebroker.com receive will still be forwarded to you but with no commission payable should you close a sale

·      A simple monthly fee of only $75 per building listed per month to be charged from January 1st 2012

Best of all you don’t need to do anything to benefit from this change!  Your listings will be updated automatically from January 1st 2012. "

This is specific to the US. I am not sure how they are handling other markets. It will be interesting to see how well this is accepted by executive suite office space operators. OfficeBroker does have a good track record in providing leads to centers, but I would image only the ones in which have had success with their leads will subscribe.  The smaller centers will probably not see the benefit.  The next question will be whether or not they remove the listings for the properties that do not subscribe or use them as bait for those who do. Another alternative may be that they will keep the non-subscribers on a commission basis.  We will have to wait to see.

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Executive Suites , Flexible Workspace , Office Rental , Office Space

How Do We Find Office Space For Our Clients?

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Here is a great article that describes the process our reps go through to ensure they find you the best possible office space at the best price.

Maimi office space tenant rep"I was recently asked that question by a reporter from Miami Today.  Actually she emailed me the question in advance of an interview.  My first off-the-cuff response was “simple, I pull the database, make a bunch of calls, know my buildings and off we go”.  Then the next morning during my walk, I began thinking that it’s not that simple.

Before I can search the database and make a bunch of calls, I have to know what I’m looking for. That means a bunch of nosy questions for my client, a walk-thru of their current location and a thorough understanding of their budget, use, employees and a host of other items.  With a seemingly ample inventory of office space, on the surface I could have 50 possible spaces for a client.  When I began applying the criteria that I develop from my client interview, the number begins to shrink very quickly.  

Sometimes it suddenly develops into a search for the needle in the haystack.

When you are interviewing a tenant rep broker to represent you in your search and/or renewal of your office, who is doing all the talking?  If it’s the broker, tread carefully.  They may not be listening and thus will not completely understand what you need.  This can result in wasting your time touring spaces that do not fit your needs and even proceeding into negotiations before discovering a “deal killer” problem with the space or building.

I try to remember the old sales axiom:  “You have two ears and one mouth, so you should be listening twice as much as you speak.”  The exception is if you make the mistake of asking me about my children.

So how do I find the space? Through a lot of research both with the client and by knowing my market.  Contact me me so I can help you with your office lease on the Miami area."

Guest Post by our Miami Office Representative

Miami Office Space , Office Leasing Tips , Office Rental , Office Space , Tenant Representation

Coworking Office Space User Costs

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Coworking office spaceAccording to a recent article in Gigaom.com coworking space costs less for a user than using a coffee shop if you take into account the cost of buying drinks and snacks.  According to the study quoted, the average monthly cost of using the facility by way of a flexible desk is only $152 / month. A 24 hr / 7 days per week plan would run around $207.00 / month and a permanent 24/7 desk would be $387.00 / month.

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Coworking office space , Flexible Workspace , Office Rental , Office Space Negotiations , Sublease Office Space

Understanding the Tenant Improvement Workletter

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When leasing commercial office space to house your business, you may be lucky enough to locate a space that is just perfect for your needs without a single change. That, however, is not usually the case and changes may be required to fit the office space to your specific requirements. Before beginning any negotiations, it is important to understand two key terms:

Tenant Improvements (TI): This term refers to the construction or remodeling of leased commercial real estate that are made to accommodate the needs of the lessee. This could include adding or removing interior walls, signage, lighting, wiring, flooring, or other changes needed. The cost of these changes is negotiated between the landlord and lessee and agreement must be reached as to which party will pay for exactly what expenses.

TI Workletter: This is a written legal document negotiated between the landlord and lessee that outlines exactly what office building standards are used in any TI construction and the number of items supplied in the leased space such as light fixtures, power outlets, and other items required to make the space suitable for the lessee. The document also outlines how much the landlord will pay and what financial responsibilities on the part of the lessee may be.

TI Workletter Issues:

The Tenant Improvement Workletter may include:

  • Exact descriptions of the TIs to be built
  • The design process to be followed
  • Contractors or other parties that will perform the TIs
  • Who will pay for what improvement
  • A clause regarding changes the tenant may want to make after initial design
  • Definition of what happens if TI work delays result in impacts to the tenant move date

Scope of Work and Changes in Scope

The landlord’s architect, planner or designer prepares plans and specifications defining the TIs to be performed. Because the landlord likely owns the entire building, he or she will control this work because of potential impact of the TIs on the building or building infrastructure. The tenant should be consulted and involved in the process and a time schedule should be agreed upon. The landlord may agree to pay for certain basic improvements but if the tenant wants to make upgrades from the building standard, the costs will be levied on the tenant. Tenant requested changes are usually paid for by the lessee. If the lessee requests changes in mid-stream, the change in scope will be at their expense and may impact the move in date without any penalty on the part of the landlord or construction team.

Construction Phase

The landlord will normally be the party in charge of obtaining bids for agreed upon changes, selecting the contractor and obtaining permits, as well as managing the work and ensuring that as-built drawings are prepared. However, should the tenant be permitted to perform the TIs, he or she will be required to take care of all items above plus obtain payment and performance bonds and obtain lien waivers from all parties working on the commercial office space.

Payment for Tenant Improvements

The workletter must specify exactly who is responsible for paying for the TIs and how much will be paid. In some cases, the landlord will agree to a “turnkey” TI where all costs are absorbed by the landlord for the initially agreed upon improvements. Leases commonly provide a tenant improvement allowance stated in an amount per square foot rented and in this case the landlord pay the allowance and the tenant pays for all improvements. The workletter must outline exactly what the allowance can be used for such as planning, permits, and construction, as well as what can not be upgraded with the funds from the allowance, often items such as telecommunication wiring, trade-specific fixtures, and equipment.

Work Delays

This portion of the workletter should address exactly what happens if the facility is not ready for tenant occupation by a defined move in date. Usually the landlord does not have any financial liability because of late delivery and the lease normally remains in effect during any delays. If the delay is caused by the tenant, there is no reduction in rent due. However, the tenant should pay close attention to workletter clauses regarding delays and negotiate a better outcome if the delay in work is not their fault. There may be consequences negotiated into the workletter that result in contractor penalties or rent abatement if the delays are in no way caused by tenant delays or tenant requested changes of scope.

This is one of the areas that a good tenant representative will take the lead on assist you. Understanding the 'norm" in your are is important to make sure you get as much of an Office Space Tenant Improvement allowance as possible.

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Lease Negotiations , Office Leasing Tips , Office Rental , Tenant Representation