Bob - Walt, if I’m an office tenant looking for space in this current real estate market, what are some things I need to be thinking about when considering renewing my current lease or looking for a new location?
Walt - Bob, good morning, there are opportunities for tenants in this market, when considering renewing or relocating. The office market continues to experience high vacancy and rates are around $18 sf/yr to $21/sf/yr for class A space, $15/sf/yr to $17.75/sf/yr for class B space, and $10/sf/yr to $13/sf/yr for class C space.
At Sperry Van Ness a good portion of our daily activity is focused on representing tenants in this market.
Our four step approach is to first, develop a strategy that outlines the objectives and expectations in the current market, next, we go through an extensive needs analysis to determine the space plan, growth, budget and location requirements. We then develop a market survey, organize property tours, and develop a short list of potential properties. Finally, we perform financial analysis, handle lease negotiations, and stay involved in the tenant improvement construction, move in, lease commencement and beyond.
Bob - I would imagine that the landlord has the upper hand in the tenant negotiation process. Landlords are dealing with tenants every day, and as a tenant, that seems like an event that happens for most tenants only once every several years.
Walt - That’s a great point. And as a tenant you have several options when the lease is approaching the expiration date.
The tenant can also do nothing and let the landlord dictate the rate and terms of the new lease, which is probably not a good scenario.
Another choice is the tenant can try to negotiate the renewal or relocation on its own, but as you said, the landlord is ahead of the tenant in that arena tenants might be unaware of current market rates, incentives being offered in the market, vacancy rates and general market conditions.
The better choice is to call the commercial real estate broker that specializes in commercial leasing, like Sperry Van Ness, and have them implement and develop a strategy to help make a tenant make wise business decisions.
We help companies spend time on what’s important to them, which is their business, and let us spend time and effort on finding the best potential location and pricing for lease space in this current market.
Bob - Walt, how can people get a hold of you today to talk about leasing in this commercial real estate market.
Walt - Thanks Bob, give me a call, Walt Arnold, 256-1255, our website is waltarnold.com. Bob thanks for the time today, have a great week and save some of the candy for the kids. Happy Halloween, talk to you next week.