Entries Tagged as 'Office Space'
According to Loopnet "Commercial property prices, as measured by the Moody's/Real Commercial Property Price Indices, or CPPI, are now 40.6% down from their October 2007 peaks.
The all property-type index fell 3% in August to 114.06, which is down 32.8% from a year ago.
The national office index value actually increased in the second quarter by 4.1% from the first quarter to 128.96. But it's down 27.4% from two years ago.
Each of the remaining property sectors - industrial, multifamily and retail - saw declines in the second quarter when compared to the first. Industrial values were down a whopping 20.4% from the first quarter to 131.3; multifamily was down 16.3% to 131.93, and retail was down 7.9% to 138.3."
What does all this mean to the office tenant? According to the report, Landlords have lost over 27% of the value of their buildings over the past 2 years. As I mentioned in a previous post, it is imperative for the prospective tenant to know what the financial situation is for the building that they are considering occupying. An average loss in value of over 27% means that some have lost more while other less. This is a situation that can be compared to that of residential short sale, where the value of the building is less than the mortgage outstanding. Many owners just walk away in these situations and it can happen with office buildings as well.
The key for the prospective tenant is to make sure that they have a non-disturbance clause in their lease agreed to by the Lender, not just the Landlord. The last thing you want to have happen is to be evicted without notice. Tenants and prospective Tenants need to know what is going on with building financing. It is not always easy to find out. This is another good reason to work with a tenant representaive who knows your market.
Buying Office Space , Lease Negotiations , Office Rental , Office Space , Office Space Negotiations
Over the past year the office space industry, OfficeFinder included, has seen a significant increase in
the number of businesses looking for virtual office space. Estimates are
anywhere from 30% to 50% more than during the same period last year. Much of it is believed to be related to the economy. In particular, both businesses looking to save money and unemployed professionals setting up their own low ovewrhead home based business. A virtual office
allows a business the opportunity to cut costs while maintaining a profession
business image at a prestigious business address. While no office space is
actually rented, most programs do allow virtual office clients to rent office or
conference rooms on an as needed basis for a discounted price. The price range for a virtual office is usually between $60 and $300 perr month depending on the services used and the market.
More on Virtual Office Space
Find a Virtual Office
Home Office , Office Rental , Office Space , Virtual Office Space
According to Wells Fargo Economics Group "The Recovery Will Be Agonizingly Slow. So it indeed has been. As this short quote from the Executive Summary of our 2009 Annual Outlook (published in December 2008) neatly summarized, the economic recovery faces a number of secular challenges that will alter the pace and composition of growth. For many decision-makers, the outlook for 2010 suggests continued change and adjustment to an altered reality of more government/less private sector contributions to growth, greater caution/less leverage for consumer spending, greater prudence/less speculation in lending and the importance of exports in moving the U.S. economy."
This related to the glut Office Space for lease means that we have a long wait until the markets start to tighten up, probably in the neighborhood of 2012. Employment is the key to filling office space. As long as the employment numbers are negative we will continue to see more office space become available. Even when the employment numbers begin to grow, office space for lease will still lag behind while companies fill the spaces they still have under lease, but have not been using, with their new employees.
This is bad news for Landlords, but good news for Tenants. Tenants will be able to call the shots, but will need to be careful. One of the big problems that arises in such a weak market is that of foreclosure by lenders on office properties in which the owners are unable to meet their obligations. Tenants and prospective Tenants need to know what is going on with building financing. It is not always easy to find out. This is another good reason to work with a tenant representaive who knows your market.
Much attention is generally paid to subordination clauses in on office lease, but that is not enough. A key clause to make sure you are protected and not put out on the street in the event of a foreclosure is a non-disturbance clause. In these turbulent times you may even find that it is not enough to just have this in your lease, but also need to have it agreed upon by the Lender. A good tenant representative in conjunction with a good real estate attorney can make sure you are protected. Dont' skimp on this. It could be a big problem.
More inforamtion on Tenant Representatives.
Lease Negotiations , Office Rental , Office Space , Office Space Negotiations , Tenant Representation
Accurate square footage numbers are tough to come by in the commercial real estate industry. As a tenant, you know you are going to pay for more space than you physically occupy, but how much and where does it come from is a mystery to most. As a broker, manager, or owner, you may know the loss factor of your building, but do you really know how accurate it is? Being a knowledgeable tenant, broker, manager, owner, seller, or buyer is an absolute must in this industry.
There are many questions I have encountered in my years measuring commercial office space; nothing more so than, How do I know these measurements are accurate?
While living in Southern California, I measured from San Diego to Los Angeles to San Francisco and everywhere in between totaling well over 3 million square feet following the Building Owners and Managers Association (B.O.M.A.) Standard Method for Measuring Floor Area in Office Buildings. Currently in New York City and so far having measured well over 1 million square feet using the Real Estate Board of New York, Inc.s (REBNY) Recommended Method of Floor Measurement for Office Buildings I can tell you that there is no way to know accuracy unless there has been a recent re-measurement of the building.
Buildings change hands, plans get lost, each management company or owner adds a little higher percentage to the building, a seller may misrepresent total square footages, etc. Whatever the case is, if a building is over 10 years old (which most are), than there are probably no accurate square footage numbers. Some buildings have never been re-measured since the first architectural drawings. In this case, it is very possible the building could grow by up to 5% of rentable square footage from a re-measurement.
As tenants looking for space, there is really nothing you can do to make your odds better in getting into a space with a low loss factor. There are only a few things that you can do to make the proper decisions for you and your company. First is having the knowledge of how space is calculated and what the owners and landlords are able to do under the law. The second is to work with a good enough broker to negotiate the best deal. If you really want a space but it has a high loss factor, it is best to try and negotiate as much as possible. The four most important things you would want to negotiate to offset costs are price per square foot, how much work they are willing to do to make the space fit you, how much free rent they will give you, and how much of a security deposit to put down.
In todays day and age, people should not have to guess or wonder if what they are getting is accurate nor should a tenant have to pace off the space to get a terribly inaccurate measurement. That usually does more harm than good. Also, an accurate as-built floor plan is a convenience often overlooked by management and may lead to being overlooked by a potential tenant.
If you are concerned about your space requirement, this site has a great square footage calculator, but you may not know really what type of space you need. An even simpler calculation which gives you just enough space without being overcrowded or too open is this: take the number of employees you have and multiply that by 100 (sq. ft/person), than multiply that by 1.35 (35% for circulation) and now you have a fairly accurate number for the amount of space you need. This is your useable number, or the amount of you physically need to occupy. Then you need to multiply that number by 25-35% in order to know what Rentable number you need to be looking for.
Example: If you have 7 employees x 100 square feet = 700 x 1.35 (35% for circulation) = 945 Square feet. This is what you will occupy, but you then need to find a rentable number: 945 sq. ft x 1.30 (30% loss factor) = 1,228 sq. ft rentable. You will find this is close to what the calculator on OfficeFinder yields, but it is much simpler way to figure it out.
For more information on building measurements in New York City, feel free to email me at email@example.com. For more information on anything from above, feel free to visit AD+D. And for an extremely in depth look at the REBNY Standard (for those in the NY tri-state area) visit AD+D/REBNY.
David J. Aube
Aube Design + Development
Manhattan Office Space , New York Office Space , Office Space
Even when I am in the hospital, Office Space seems to follow. I was delighted with the view from my hospital room after surgery a couple of weeks ago. I had both a great sunset and daytime view of the Seattle skyline.
Office Space , Seattle Office Space