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Tenants Slow to Make Decisions

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According to a report by the real estate firm Studley, Chicago’s downtown office lease transactions are only about one-half of what its historical long term average has been. Completed office space transactions reached 1.1 million square feet in the 2nd quarter and 7.2 million over the past 12 months leaving the Class A vacancy rate in the Chicago CBD at 18.5%. With a market size of 120 million square feet of office space in the Chicago, Downtown area, this transaction rate is close to a complete stall.

Tenants are still slow to make decisions and transactions are taking longer to complete.  There are a number of larger tenants in the market now who will have to make a decision within the next several months as to what to do with their expiring office leases. The gap between landlord and tenant expectations are narrowing and deals are becoming easier to make.  As the economy picks up, these tenants will be making decisions and hopefully Chicago Office Space will see some better activity.

Chicago Office Space , Office Space , Office Space Negotiations

Next Year WIll Be Better For The US Office Space Market

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The office vacancy rate in the US is the highest it has been in 17 years, since 1993. Effective rents were lower in the 2nd quarter as the office space market continues to struggle. It is not all bad news. The negative trend is slowing.  In other words the vacancy rate is increasing at a slower rate and the bottom may be in site.

According a study published by the National Real Estate Investor magazine, "There is reason to be optimistic about the fate of office properties. A turnaround may yet happen later this year, but the real recovery will come to fruition next year"

Office Space , Office Vacancy Rate

Ready to Quit Your Job? You Are Not Alone!

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According to the article below from the OC Register, 20% of professional employees are considering quitting their jobs. Undoubtably most won't considering the economic climate and the difficulty in finding jobs. But, if you are one of the ones who act on it, there are many options available to lease office space to start your own business. The options range from a home office, to virtual office space or executive suite office and of course conventional office depending on your needs, budget and image requirements.

"Two out of five professionals think about quitting their jobs after taking their summer vacations, according to Regus, a provider of flexible workplace ideas. Can you relate?

Of course millions of workers heard about JetBlue flight attendant Steven Slater's spectacular "I quit" recently, grabbing a beer and sliding down the plane's emergency chute. But he hadn't been on vacation. In fact, he probably needed one.

But apparently a vacation doesn't help for many workers."As workers pack up their swimsuits this summer, they are more likely to dwell on the pros and  cons of the job that is waiting for them at home," said Regus Regional Vice President Sande Golgart.The top reasons survey respondents gave for wanting to quit:   
* Lack of communication with management 40%   
* Lack of career advancement 37%   
* Feeling overworked 34%   
* Company lacks vision 31%   
* Colleagues are incompetent 28%   
* Lack of administrative support 26%   
* Rude colleagues 21%   
* Boss takes credit for respondent's work 20%"

Stress caused by overwork has escalated during the past recession with people working harder and longer to make sure they can pay their bills," Golgart said"

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Executive Suites , Home Office , Office Rental , Office Space , Virtual Office Space

Find Office Space Quickly

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You’re an entrepreneur who’s excited to start up or grow your business. However, although it’s tempting to work from home, you realize you want a corporate location that doesn’t include kids’ toys and a laundry room. But where can you find office space for lease quickly and easily?

Ironically, finding office space is as easy as heading to your computer! In the age of the Internet, small business people like you can locate office space all over the world with just a few strokes of the keyboard. Of course, you first have to make a few decisions in order to expedite your office space finding experience:

1. Determine where you want to work.

Are you going to look for office space in your hometown or are you willing to commute to a neighboring city? It’s important to think about what type of work you do when considering this. For instance, if you’re going to host many clients at your office space locale, you’ll want to pick a place that’s convenient for them (rather than convenient for you.) If you’re not planning on having many on-site client meetings, a more out-of-the-way office space may be acceptable.

2. Figure out how much office space you need.

Will 200 square feet be enough for you? How about 500 square feet? Or do you need much more? If you’re not certain what such a space looks like, it’s easy to map it out at home. Just pick a rectangular-sized room and measure the walls in feet. Then, multiple the long side by shorter side. Thus, a 12 foot by 10 foot living room would be 120 square feet. A rule of thumb for conventional office space is about 200 square feet per person. To get a better idea, try our office space calculator or visit our space standards page.

3. Decide if you want to share an office space with someone else.

If you’re not in competing businesses, sharing office space can make a great deal of economic sense, especially for entrepreneurs. For example, you could potentially purchase a larger office space than either of you could afford individually as well as share the costs such as heating and electric. Additionally, you might be able to eventually share a receptionist. Executive Suites and virtual offices are also an option.

4. Determine what kind of office building in which you’d like to work.

Are you the type of person who likes to work in a corporate office space? Then you’d probably do well in a large building that was built specifically for commercial offices. On the other hand, if you’re looking to have a “homier” atmosphere for your business, you may want to seek out a nontraditional office space, such as one that’s part of what used to be a Victorian home or a red brick schoolhouse.

5. Figure out what your budget is.

Finally, before you start looking for office space, you’ll need to figure out how much you can reasonably afford. It’s always a good idea to take this step before ever jumping on the web to look for a location for your business. That way, you won’t be tempted to incur more debt than you can actually afford. our office market information in the OfficeFinder Local can help get you familiar with what is happening in your market.

6. Get professional assistance.

There are agents who specialize in representing small businesses like yours find the right office space and make sure you avoid mistakes. Using a tenant representaive won't cost you anything. All the fees are paid by the landlord. OfficeFinder is a good place to start with local reps inover 550 markets.

Remember – if you need an office space, it’s as easy to find as your keyboard and mouse!

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

Maximize Savings on Your Commercial Real Estate Transaction

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Currently, there is excess office space inventory available in not only the Minneapolis commercial real estate market, but throughout the US and worldwide. This bodes well for anyone involved in leasing, acquisition or lease renewal, as sellers are anxious to dispose of their property. While current economic conditions are certainly favorable for acquisitions, good preparation and research can put you in even a better position to save money on your commercial property.

Timing

Time can be your ally or quickly become your enemy if you don't plan to use it correctly. Plan ahead and start searching for space early. It is best to start the search process at least 9 months in advance to uncover your best choices. For example waiting until you only have a three month minimum time frame limits your options as your best choice might not even be in play during this period. Not only does a minimal timeframe limit your choices, it reduces your ability to conduct an effective negotiation. Potential landlords and their brokers will sense or "read' your urgency with a short window and negotiate accordingly to achieve their best terms. When you have a longer time frame you can utilize time by effectively stringing out the negotiation and extracting additional concessions as you are in no rush to make a decision while the landlord's situation may require immediate tenancy.

Also note that if you are renewing, your current landlord will try to "string you along" to try to have you run out of time and force you to renew because there is not enough time to build out your new space before lease expiration. Time is your ally when you have it and your enemy when you are racing against it.

Options

It is always best to have three options or at least a good 2nd option when it comes to space alternatives. Use one to leverage the other to extract the best terms when negotiating. Don't be afraid to say "no" and walk away. Not having a good 2nd option minimizes the aggressiveness of your negotiation and can cost your firm money. Had you been able to "play hardball" and use leverage to its fullest potential, more economically favorable terms and concessions would have been achieved.

Representation

Having a knowledgeable, experienced representative can save you significant cost. Someone who regularly negotiates commercial real estate transactions knows the best negotiation tactics for your business and can uncover issues that can be used to your advantage. An experience professional won't be emotionally swayed in the heat of the moment.

Space Productivity and Efficiency

You need to clearly define your usage, budget and location. Efficient use of space will save you money. Apply BOMA standards to usable/ rentable space to make sure you are getting all the space you are paying for and are not paying for space you don't get.

For example, have your space planner verify measurements and be creative with design.

A creative design can place your productive people on the interior of a space rather than by window. Also, wonderful things can be done to the interior to create a great working environment even if the outside of a building may not be as appealing. A good architectural firm can convert most buildings to accomplish the environment you require, i.e. an Old Victorian to an Ad Agency.

Be flexible on other issues and the transaction will fall in place. Today, Landlords are less likely to pay for lavish tenant improvements, so efficient space usage and simple, but tasteful improvements are key. For example, you can present a high image to your visitors by focusing upgrades on your reception and common areas and still save money by staying basic with the individual offices and "back" areas.

Operating Expense

With an operating expense cost-pass-through, more rent will have to be paid as building operating expenses increase over a base year and cost-pass-through's take effect. By comparing previous years increases in your analysis of alternatives, you can make sure that your starting point is appropriate. It is very typical in today's market to request and receive CAMT Breakdown's from each landlord whose property you are considering. Try to negotiate some type of cap on annual increases, as costs (ie: energy; maintenance; materials just to name a few) tend to escalate at a rapid pace each year.

Be aware of categories that are typically included in CAM charges in your particular market vs. those that are not. For example, are light bulb and ballast replacement typical CAM charges in your market? Is a particular Landlord charging tenants for general capital improvements to the building or project vs. for only those capital improvements that are designed to reduce operating costs for the building or project?

Since CAMT charges range from $7.00 - $9.00 psf in Class B office buildings and from $10.00 - $13.50 psf in class A office buildings, it is imperative that you don't get charged for items that should not be charged for.

Summary:

With the current economic situation, you should be able to find and negotiate favorable commercial real estate deals, and you can save more money with better planning and strategy.

Guest post by our OfficeFinder Local Minneapolis representative

Minneapolis Office Space , Office Relocation , Office Rental , Office Space , Office Space Negotiations