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Seattle Office Space Market Conditions

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Home to Boeing, Microsoft and a number of other burgeoning businesses, Seattle, Washington is the largest city in the Pacific Northwest region of the United States.  Known as the Emerald City, Seattle boasts a multi-cultural population of around 635,000 and is one of the fastest growing cities in the U.S.  Also home to the University of Washington, Seattle has shown to have the highest percentage of college and university graduates of any major U.S. city*

Despite the fact that Seattle experiences less rainfall than Boston, New York, Washington, D.C., and Atlanta*, it has earned a reputation for being the wettest city in the U.S.  Regardless, the many lakes, parks, forests, and rivers make living in Seattle an outdoorsman’s dream.  The people of Seattle enjoy many non-rainy days when they can sail, ski, bicycle, camp and hike.  When they’re not outdoors, Seattleites like to be indoors enjoying the local music and arts scene.  Seattle has been the launching pad for many popular rock bands and musicians, including Nirvana, Pearl Jam, Jimi Hendrix, Kenny G, Heart, and most recently, hip-hop sensation Macklemore.  Additionally, the city is home to several pro-sports teams, including the Seahawks, the Sounders, and the Mariners.

Seattle is situated on the Puget Sound, making it an oceanic port - the eighth largest in the nation.  Although logging was the region’s first real industry, the proximity to the Pacific Ocean has led to trade with Asia becoming a large part of the area’s economic activity.  Additionally, the city is full of attractive landmarks such as the Space Needle, and Pike Place Market, as well as several unique neighborhoods, making it a favorite destination for tourists from all over the globe.

Seattle has experienced many economic highs and lows during its history.  After the boom of the lumber industry, the city experienced a serious economic decline, but then boosted itself out of the slump by becoming a major transportation center.  During the post World War II era, the city again experienced an economic slide, but recovered due to Boeing’s surge in the commercial aircraft market.  Despite its economic crises over the years, Seattle has demonstrated the ability to strengthen its infrastructure and come up swinging.

With one of the lowest levels of unemployment in the country, Seattle is experiencing an overall strong economy.  However, the Seattle office space and commercial real estate markets are showing signs of leveling off. 

Despite this, office rental rates have continued to rise with the most expensive office space in the Seattle area being Class A space located in the Bellevue Central Business District at over $35.00 per square foot.**

More information/articles on the  Seattle office market.

Market Area

YTD Total Net Absorption SF

Total Vacancy SF

Average Asking Rent SF

Downtown

Class A

Class B

 

913,554

425,876

 

4,083,312

1,716,841

 

$33.44

$28.22

Northend

Class A

Class B

 

29,736

-2,759

 

178,860

1,071,621

 

$28.91

$26.23

Southend

Class A

Class B

 

13,539

323,009

 

172,943

1,376,004

 

$25.81

$22.75

Eastside

Class A

Class B

 

55,533

92,691

 

1,239,960

1,642,657

 

$34.47

$29.87

Source: Jones Lang LaSalle Office Statistics - Quarter 2, 2013

* Wikipedia
** Colliers International Puget Sound Region Research and Forecast Report - Quarter 2, 2013

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By: James Osgood

Office Rental , Office Space , Seattle Office Space

Do You Need Expert Assistance in Finding Office Space for Rent?

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Recent reports show a stark contrast in leasing trends for office space for rent in the commercial real estate market. While foreign investors appear to be making a play for prime commercial space, reportedly increasing year-over-year investments by over 83%, office construction has waned by nearly 17%. Why the sharp conflict in data?

Analysis shows that there area opportunities using tools to gain an investment advantage in the market- but this can be challenging for business investors who are focused on building clientele and daily operational management of the company.

Current and Future Space Needs

Whether the tenant will be a small operation or a larger company the basic needs are the same- efficiency, cost effectiveness, room for expansion, and strength of location. A good tenant rental representative can gather the information regarding these needs and complete an analysis upon which available locations can be ranked, investigated, and negotiated. If your company is currently housed in an inefficient space the multi-step processes necessary to keep everyone 'in the loop' can create redundancy and confusion. While a move can be costly, done correctly it can reduce future costs significantly. Would moving from your current location disrupt client service? Or are you able to make a move without affecting the product or service you provide? Then you may consider...

Market Availability

Thorough knowledge of the region including up-and-coming micro-markets can be the key to entering a market segment previously unconsidered. Sluggish commercial rentals have also slowed the rate of construction, so existing space becomes more appealing and potentially more negotiable. Recent reports also state that this shift in the market is creating an increase in tenant concessions and free rent, despite the increase in square foot pricing. Previously untapped commercial properties, or those that may be re-zoned to accommodate businesses, can be an ideal solution to a limitation in new construction. Repurposing of properties is a popular trend and is gaining in favor with clients as well. People tend to be drawn to the historic or recognizable- tourists included- and appreciate the visionary who takes on a forgotten space. 

Investment Potential

A volatile leasing market creates uncertainties in investing- how can you determine (or try to predict) the rate of return for your rental investment? Or reduce your potential for overpaying? Foreign investors see the potential for future profits in taking a measured risk in office investments. The leasing velocity of a space, which includes knowing historic rental values, re-leasing potential, and vacancy rates all play a role in the final dollar values. Perhaps you are feeling bound to a lease that is just not amenable to your needs, or the structure of your contract is no longer in league with the community averages? A proper representation of your needs, which may even need an overview, can leverage your remaining time in the space and perch you at a better vantage point for future negotiations. More about leasing office space vs. buying.

Due diligence is a necessary factor in renting office space and a strong real estate partner allows you to focus on your business during the negotiations of a transaction. Contact us and allow us to introduce you to the advantages of using a tentant representative while seeking rental office space for your commercial business needs.

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By: James Osgood

Buying Office Space , Lease vs Buy , Office Building Sales , Office Rental , Office Space , Tenant Representation

Creating an Agile Workplace Using Office Space Hoteling

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So, You think you might want to change your traditional office into an office hoteling agile office space but have no idea how or where to begin. From the experience of businesses that have successfully performed the transition, we’ve collected some steps that will help you.

Do Your Research

Research on the Internet net and learn about the types of companies that have make successful transitions. Look for ways where your business is similar and ways in which it is different. Do a study on your office over the period of a week or more and assess the actual occupancy. If you find your company office space has 20% or more vacant on average, then this may be a good alternative for you. The higher the normal vacancy rate, the better suited to office hoteling. If you find you run 50% or more vacancy, it only makes good sense to implement office hoteling.

Identify Employees Not Suited to Office Hoteling

Look at your skill mix. Few companies have 100% of their employees away from their traditional workspace the majority of the time. Your receptionist, office manager, some executives and management are in the office on a 90% or greater basis. The traditional office is where they perform their jobs. Those workers should be included in the office hoteling plan as permanent on-site and should remain with their traditional assigned workspace. Choose employees available for agile working is the key to making work more efficient for the hoteling workers once the transition is made.

Determine the Maximum Employee Density on an Average Day

Having looked at average occupancy vacancy rates previously, you should be able to translate that study into a highest average occupancy rate. The lower the occupancy, the more money you can save, but you need to be careful to provide enough hoteling workspaces. If not, you could find unhappy employees standing around waiting for workspaces. It is far better to set up an extra workspace or two to be on the safe side. Office hoteling workspaces don’t have to be large or take up a lot of square footage. Better too many than too few.

Choose an Easy to Use Office Hoteling Reservation Software

When employees choose to come in to utilize a workspace or conference, they will need to log into a control system; the office space hoteling reservation system. By entering a unique identifier, they can pick any available workspace to use for their time in office. They can reserve a meeting room if a client gathering is their purpose, even reserving those spaces several days before the meeting. When the employee has finished using the space they reserved, they simply log out of the office hoteling reservation system, or in the case of a meeting room, might close out their meeting room use and select a workspace to make calls or type up minutes of the meeting. A good office hoteling reservation system will even know which workspace they are using and allow the receptionist to route their calls to where they are at work.

There is Help

Office Hoteling is not a new field and there is help available. There are consultants who specialize in this field and can help you with the transition. it is not necessarily inexpensive to implement an office hoteling system, but it results in savings on average of 30% - 40% of your office rental costs. It is well worth the effort.

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By: James Osgood

Agile Workplace , Office Hoteling , Office Leasing Tips , Office Rental , Office Space Design

Los Angeles Office Space Market Conditions

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Los Angeles, known as the City of Angels, boasts a population of 3.82 million people soaking up the sunshine and surfing the waves, making it the most populous city in Southern California.  It is home to people from over 140 countries, speaking 224 different languages.
The city is made up of 80 districts and neighborhoods.  Some of the more well known communities are Venice, Bel Air, Hollywood Hills, and Brentwood. Generally, Los Angeles is divided into the following areas: Downtown Los Angeles, East Los Angeles, Northeast Los Angeles, South Los Angeles, Harbor Area, Greater Hollywood, Wilshire, Westside, and San Fernando and Crescenta Valleys.

Los Angeles is not only a mecca for the entertainment and media industry, but also for tourism.  With so much diversity in Arts and Culture, over 800 museums and art galleries, sports teams from all major leagues, and some of the most beautiful beaches in the U.S., Los Angeles is the place to be.

Los Angeles boasts a very diverse and driven economy.  One of the most substantial economic markets in the U.S., Los Angeles has strengths in business, international trade, entertainment, medicine, research and media, just to name a few. The Long Beach and Los Angeles ports, together, comprise the fifth busiest port in the world.  The city is home to six Fortune 500 companies, including real estate group CBRE.  The Downtown Financial District holds offices for many of the U.S. top financial companies, including Wells Fargo, and Bank of America.

Being the second largest city in the U.S. comes with its share of problems though, including a high crime rate and high taxes.  With the city of Los Angeles charging a gross receipts tax based on a percentage of business revenue, many companies have opted to move outside of the city limits into neighboring cities with flat tax fees.  In order to attract more new businesses to Los Angeles, the city has implemented several local incentives, including Work Opportunity Tax Credit, and reduced parking requirements.

In the second quarter of 2013, the Los Angeles office space market experienced a +18,800 square feet net absorption, an increased office vacancy rate of 18.2%, and an increase of asking rental rates to $2.52 per square foot per month or $30.24 per square foot per year.  Given the current office market conditions, tenants are able to obtain landlord concessions such as free rent and improvements. West Los Angeles appears to be the most expensive office space in the area, coming in at $3.33 per square foot per month ($40.00 / sf / yr).

Market

Total Office Vacancy %

Net Office Absorption SF

Asking Mo. Lease Rate SF

Central

20.3%

-14,800

$1.88

Downtown

19.2%

-46,500

$2.75

West

16.0%

83,400

$3.33

Tri Cities

18.1%

-140,600

$2.63

San Fernando/Ventura County

17.7%

172,700

$2.16

South Bay

22.5%

-121,400

$1.99

San Gabriel Valley

13.8%

86,000

$1.89


 More on Los Angeles Office Space for Lease

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By: James Osgood

Los Angeles Office Space , Office Rental , Office Space

How to Find an Office for Rent that Embraces Current Workplace Trends

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Whether you are relocating your business or are moving into your first office, finding the right office for rent can make a big difference to your company’s productivity. While the look and feel of the building, its landscaping and its location determine the reaction of clients, customers and suppliers, the setup of the interior may put you behind the eight ball when compared to your competitors. The easiest way to avoid this pitfall is by staying on top of current trends and implementing them as much as possible.

Avoid the Cubicle Setup

Invented in the 1960s by a savvy office furniture manufacturer, the cubicle has long been hailed as the most conducive setting for the office worker. In a wireless world that no longer needs a lot of the office machines and accompanying furniture that used to be the norm, the cubicle can now actually be a damper on your staff’s productivity. Business Insider notes a survey of 7,000 professionals in a global setting, which had 19 percent decree that the cubicle is a thing of the past.

There is no Need for Offices with Doors

With the exception of doctors and lawyers, the same survey found that 16 percent of respondents noted the disappearance of individual offices with doors. This is particularly true for managers and other executives. Rather than working behind closed doors, 21 percent of survey respondents noted that these professionals are joining the staff in an open workspace environment.

Become Part of the Trend

Commercial real estate brokers have been examining these trends. It has become clear that today’s company thrives in an office space that meets three distinct criteria.

  • Support of ad hoc team work. When wireless technology is the norm, there is no need for workers to stay at their desks. When a project calls for collaboration, team members occupy the same work space for the duration of the job. Creative office designers have experimented with huddle rooms and smaller conference rooms with movable wall panels.  
  • Layout is king. There no longer is a need for the big office that supports plenty of individual workspace. Rather, go for a smaller space as long as it has the open floor plan that lets you set up work spaces based on projects and current business needs.
  • Embrace the coffee shop concept. It may seem at odds with everything that you learned in business school, but there is a strong trend toward renting a space that is kept large by adding a wide variety of seating options versus formalized work stations. Remember, wireless technology makes it possible to take the laptop or tablet anywhere your workers need to be.

The professionals at OfficeFinder, LLC know that it can be a difficult task to find just the right space. Contact us today to discuss the current trend in office rentals and to find out how we can help you get set up.

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By: James Osgood

Office Leasing Tips , Office Rental , Office Space , Office Space Design