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Office Space Tenants Are In A Cost Cutting Mode

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"Cost cutting is still going to be the highest priority" for corporate real estate in 2010, Peter Riguardi, president of Jones Lang LaSalle’s New York region, said in a webcast on office occupier trends Wednesday afternoon. That’s because economizing remains a watchword for many companies, and reducing real estate expenses--whether through blend-and-extend leases or outright shedding of space--represents low-hanging fruit.

Blending and extending, which has come back into favor in the current leasing market, will remain a big trend for the foreseeable future, Riguardi said. It’s one of many opportunities for tenants in these days of reduced rents and greater landlord concessions. The current climate also offers plenty of chances for upgrading the location and the space, and for using market leverage to enhance non-economic lease provisions.

Full Article: For Tenants, It’s About Shaving Costs

Another contributor to the problems to come in the Commercial Real Estate market.

Commercial Real Estate , Lease Negotiations , New York Office Space , Office Rental , Office Space , Office Space Negotiations , Office Vacancy Rate , Tenant Representation

Commercial Real Estate Defaults Reach A 16 Year High

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What has been lost in the housing talk recovery is the grim statistics that commercial real estate has fallen 37 percent in value in the last year.  This wouldn’t be such a big problem aside from the tiny detail that some $3 trillion in commercial real estate loans are still outstanding.  The commercial real estate debacle is already happening with defaults reaching 16 year highs.  This is already occurring before many of the commercial real estate loans reach their refinance dates.  In some instances banks are simply ignoring non-payment and giving borrowers a few more months or even years.  Why?  Because they can still claim the note is current and claim the asset at inflated values.

Full Article: The Commercial Real Estate Default Wave is Here

 

Commercial Real Estate , Office Space

Facebook Adds Another 260,000 SF of Office Space

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Facebook Inc. significantly expanded its footprint in Palo Alto’s Stanford Research Park by signing a lease for another 265,000 square feet.

This marks the second move in a year for the social media company, which left downtown Palo Alto last spring for a 150,000 square foot building once owned by Agilent Technologies. The buildings at 1050 Page Mill Road had been vacated by the medical diagnostic firm,  Beckman Coulter Inc., several years ago.

The news of the new lease comes as a report by comScore said the social networking company passed 100 million users in the U.S. in November, more than double last year's total. Its global user base is now estimated at more than 350 million.

ComScore said on Tuesday that Facebook had passed AOL as the fourth most popular Web property in the U.S., trailing only No. 1  Google Inc. (NASDAQ:GOOG), No. 2 Yahoo Inc. (NASDAQ:YHOO) and No. 3 Microsoft Corp. (NASDAQ:MSFT).

Source: Biz Journals

As Facebook expands MySpace is leaving huge amounts of office space in it's wake costing them more than $1 million / month. See post Empty MySpace Offices Cost $1 Million Per Month. It seems pretty clear who is winning and loosing in the Social Media arena.

Office Space

Dubai gets $10B bailout from Abu Dhabi

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A recent report from the AP: "Oil-rich Abu Dhabi pumped $10 billion into its indebted neighbor Monday, sending stocks soaring and sparing Dubai and the rest of the Emirates federation the humiliation of an imminent default by one of the struggling Arab boomtown's star companies.

The bailout was about more than petrodollar transfers from one United Arab Emirates sheikdom to the other. Dubai officials also seized on the news to try to repair damage done by weeks of uncertainty stemming from their unwillingness to fully stand behind Dubai World as the conglomerate looked to restructure some of its $60 billion in debts."

This should help to calm the immediate fears of a major commercial real estate default in Dubai, but also may foreshadows what will need to happen in the US as the Commercail Real Estate Crash intensifies during 2010.

 

Commercial Real Estate , Office Space

Bad News From California on Commercial Delinquencies

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According to Bizjournals "Delinquencies in the commercial mortgage-backed securities market skyrocketed more than 500 percent in October from a year ago, with California reportedly topping the U.S.

Numbers released Monday by RealPoint Research show more than to $32.6 billion worth of loans are in default compared to $5.4 billion in October 2008. The total unpaid balance for the CMBS market for October 2009 was $810.9 billion, up from $805 billion in September, according to the Horsham, Penn.-based research firm.

California reported $4.7 billion in bad loans, or 14 percent of all delinquencies. The bulk of the state’s delinquent loans were concentrated in the Los Angeles and Orange County metropolitan areas. Sacramento reported two troubled spots in October when Natomas Crossing and Del Paso Retail were liquidated."

This right on the heels of the Dubai Commercial Real Estate crisis...

Office Space , Office Vacancy Rate