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Entries Tagged as 'Office Space Negotiations'

Good News for Office Space This Week

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Over the past week we have tweeted quite a few times on the improving office space market. While we all like to hear news of an improving economy, what good news for the office space market means is that the office space market is in the process of beginning its transition from a tenant market to a landlord market. As has happened with economy in general (and will hopefully continue), this process will take a couple of years for the transformation to complete. The process will not be even from market to market, but we will see markets such as New York, Washington DC and San Francisco lead the way in declining vacancy and increasing rental rates. As employment continues to improve other primary and secondary markets will follow. The general consensus is that this will take a couple of years to happen, but most are in agreement that most markets have hit bottom and rental rates will begin to climb.

For tenants who have been on the fence as to whether or not to renew or relocate their office, now is a good time to get started to ensure a low rental rate for a long-term lease.

Recent tweets:

Manhattan Office Property Surges Bolstered by a stronger-than-expected recovery in hiring http://ow.ly/a7NMm

The Jumpstart Our Business Startups (JOBS) Act: What You Need To Know http://ow.ly/a6Wma

It's slow all over - The US #officespace vacancy rate at the end of March stood at a whopping 17.2% http://ow.ly/a6DOw

#OfficeSpace lease opportunities to tighten in second half - Office Rents on teh rise http://ow.ly/a5cxl

Information and media companies pass Wall Street as top leaser of #officespace in New York as office rents increase http://ow.ly/a3G5t

U.S. #OfficeSpace Sector Records 8th Straight Quarter of Improving Fundamentals - Asking Rents on the rise http://ow.ly/a3FRc

ULI: Consensus of Economists Sees Promising CRE Outlook Through 2014

Why Is Your Landlord Sprucing Up Your #Officespace Building? http://ow.ly/9W5IM

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Manhattan Office Space , New York Office Space , Office Space Negotiations , San Francisco Office Space , Washington DC Office Space

What Does it Mean to be an Office Tenant in an Improving Market?

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After some really bad times, the office market in US finally began a slow but steady recovery in 2011. Ryan Severino, senior economist for REIS said, “During 2011, the office vacancy rate declined by around 30 points when compared to 2010.” The result of this decline is that rental rates rose by about 1.6 percent, the first increase sine 2008. While this is not a huge increase, the recovery trend is expected to continue on a steady basis.

Office tenants in this market experience fear and doubts about where the economy is going. According to Ken Ashley, senior director of Cushman & Wakefield’s Atlanta office tenants are focusing on using floor space more efficiently, resulting in a trend for office tenants to seek out offices with less square footage, a trend called “density with dignity”.

So what does this mean to office tenants seeking to lease an office?

  • Increasing Office Rents: As noted above, the rental rates are rising slowly but steadily, so negotiating a new lease or moving to a different office space may well mean paying more per square foot than just a few months ago. Since this trend is expected to continue, if you are considering moving your office, it is better to act quickly than wait; if you delay, you will only pay more.

  • Reduced Incentives: Recently, it was an office renter’s market and renters were able to shop for incentives that appealed to their situation. For example, some landlords offered tenant improvement allowances while others offered special rates to long term renters. These incentives are very soon to be greatly reduced as the vacancy rate continues to decline and spaces fill up. Once the rental market turns a corner, the incentives will vanish completely. Again, making it the best time for tenants to make any changes being considered for the near-term future.

  • Fewer Office Space Alternatives: With changes to the rental market, the choice afforded the potential renter will be reduced. Today, many renters are seeking to move to more flexible floor plans and smaller spaces. This may well leave a wealth of larger offices at increased cost per square footage available, but this may well be exactly what you want to change for your own office. Those seeking the perfect spaces for flexible office spaces and non-traditional spaces, such as serviced office space, may find themselves at a loss for locating the space that would have readily been available only a short time ago. A matter of weeks can change the market in this area and business people take advantage of their last days of incentives and broad selections.

As with any period of recovery, whether in the commercial office market or the general economy, it is difficult to see into the future. But trends today give us the best insight into where you may find your business rental needs in the near-term future. Today is the best time to make a move and only a few months from now may be entirely too late to reap the benefits remaining

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By: James Osgood

Office Leasing Tips , Office Rental , Office Space Negotiations , Office Vacancy Rate

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

When to Start Your Office Renewal or Relocation

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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
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Miami Office Space , Office Relocation , Office Space , Office Space Negotiations

Office Space Recovery Off To A Slow, But Positive Start

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Office vacancy rates nationwide fell one-tenth of a point at the end of the 3rd quarter compared with the end of the 2nd 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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Office Space Negotiations , Office Vacancy Rate