Entries Tagged as 'Office Space Negotiations'
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.
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
Why Is Your Landlord Sprucing Up Your #Officespace Building?
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Manhattan Office Space , New York Office Space , Office Space Negotiations , San Francisco Office Space , Washington DC Office Space
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
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
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.
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
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.
Find a Tenant Rep in Your Market
Lease Negotiations , Manhattan Office Space , New York Office Space , Office Rental , Office Space Negotiations , Office Vacancy Rate , Tenant Representation , Washington DC Office Space
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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Miami Office Space , Office Relocation , Office Space , Office Space Negotiations
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