Tag Archives: office space

Fair and profitable deals, renting commercial property

Commercial Corner: Keeping Deals Fair, Yet Profitable

The Negotiating Power is Shifting with Office Leases

With the economy showing positive signs of recovery, savvy business owners and professionals are getting smarter about where they put their office and how to run it more efficiently — and for half of the expense.

They are asking for lower rents, more benefits and less responsibility.

With the surplus of office space available, renters are now in a place of negotiating power when it comes to leasing a commercial space. However, there are a few things that you as a property owner can do to make sure that you keep your negotiating power in place and keep it fair, yet profitable for you.

1. Change name for type of office space

By adding in higher level titles to an office space such as an “Executive Suite” or “Commercial Loft,” you can give more value to the space as well as make it more attractive. By placing more of a “city style” approach in the marketing of your space, you can attract larger prospective tenants. This can also help you create more of a demand for the space which puts you in a better place when it comes to who you lease to and exactly what the terms should be.

2. Market constantly, even when you are at a no-vacancy status

The negotiating power has shifted in the commercial arena, however the owner can have a bigger advantage if they have an ongoing plan to market the space in the community. I am not referring to paying for advertising the space; simply look at the properties that are in areas where professionals like attorneys, real estate brokers, insurance brokers and chiropractors are in need of clean, intelligent space and reach out to them either by phone, mail or online. Keep in touch with them every other month by reaching out through a direct mail piece or phone call; you never know when they will be on the hunt for a larger office space or a different location.

3. Add value and partner with virtual service companies

Professionals need support staff now more than ever. However, the expense of having onsite receptionists can be costly. Reach out to a virtual services company in your area, and add them into your potential offerings or even advertising.

Dentist offices are popping up now with their receptionist on a large computer flat screen to check in patients. This can save hundreds, even thousands of dollars to professionals. Make sure that you do your due diligence before you tie your building brand name to a virtual service company. A few places to check online: odesk.com or guru.com.

4. Target home-based companies and give incentives to move

Because office space has become more open and available as well as affordable, small business owners and professionals are shifting from being at their home office over the past few years to an offsite location. It’s nice to get out of the home and head to a quiet place to get some work done. Not to mention, this saves people from having that feeling that they need to work whenever they walk in the front door of their home. This is an excellent selling point. Make enticing offers to include the benefits of it being an affordable solution as well as a way for business owners to separate home from the office.

5. Hire a Broker that can locate surpluses and shortages

It is vitally important that you have a broker on your side that is not only knowledgeable about the area where your building is located, but knows where there are gaps and opportunities as well. Ask them simple questions such as, “What are your client’s average occupancy rates?” and “How well are you connected in the professional community?” Another great question is, “Have you helped your clients/investors market their property to fill their available spaces? If so, what did you do for them?”

[stextbox id=”grey”]These tips are provided by Pete Baldwin, designated broker and owner of Platinum Realty Network with offices in Scottsdale and Flagstaff, Ariz. With over 25 years of experience in business and real estate, Pete specializes in country club communities and second home investments, including large commercial portfolios. He also owns an Arizona branch of a family-owned, Montana-based company Baldwin Log Homes – Arizona Territory and has become the area leader in full- custom, handcrafted log homes in Northern Arizona. For more information, please visit www.PeteBaldwin.com.
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Sluggish Demand for Office Space in Phoenix

Sluggish Demand for Office Space in Metro Phoenix Continues

The Phoenix office market continued to feel the effects of a sluggish and wavering economy, according to Cassidy Turley BRE Commercial’s 3Q 2010 office market trends report released today.

Economic indicators remain mixed causing uncertainty as to whether our economy is headed into a “double dip” recession or a period of slow growth. The best word to describe market conditions during the third quarter is flat. Net absorption was negative for the second time this year and the overall vacancy rate increased 30 basis points to finish at an all-time high of 27.9%.

Tempe/South Chandler and 44th Street Corridor posted the largest gains in net absorption; collectively they gained more than 257,590 SF in the third quarter. Downtown North and Airport Area were the two submarkets with the largest declines in occupancy; they collectively lost 221,927 SF during the third quarter. The majority of leasing activity has been in space that is an upgrade to the tenant’s prior location, otherwise known as “flight to quality.”

This has been a trend for several quarters, as nearly all positive absorption, both the quarter and year-to-date, have come from either Class A buildings or new construction. Class A average asking rates continue
to decline as landlords compete for tenants by offering heavy concessions and discounted rates. Class A rental rates dropped nearly 2 percent in the third quarter to finish at $25.07.

With the extreme over-supply of space, overall asking rental rates will continue to soften but at a slower pace and should reach bottom within the next 12 months. Office market leasing is likely to remain flat through 2010 and improve gradually into 2011 as businesses start to add jobs and tenants take advantage of reduced rates. Landlords that have weathered the recession, remained financially strong and adjusted to current market conditions should start to see some relief as tenant demand gradually improves.

With large blocks of premium office space available, lower rental rates, a high quality of life, affordable housing and great weather, Metro Phoenix is positioned to attract companies looking to relocate or add to their current operations. These factors should improve leasing and owner occupant demand bringing some relief to the office sector.

Celebrity City, AZRE July/August 2010

Mixed-Use: Celebrity City


CELEBRITY CITY

Developer: Old World Communities
General contractor: TBD
Architect: CCBG Architects
Location: 
 NWC 32nd & Van Buren streets, Phoenix
Size: 1.3 MSF

The 10-year, multi-phased plan calls for 640 residential units within five multi-story buildings; an 820-room hotel; 177,000 SF of retail space; and 380,000 SF of office space within two mid-rise towers. Construction is estimated to begin in the latter part of 2010 or 2011.

AZRE July/August 2010

South Shore, AZRE July/August 2010

Mixed-Use: South Shore


SOUTH SHORE

Developer: Nautica Development Group Ltd.
General contractor: GCON Inc.
Architect: Berkus Design Studio
Location: 
 Arizona Ave. & Lake Dr., Chandler
Size: 657,000 SF

A mixed-use, lakeside development slated to include 186,568 SF of Class A office space; a 95,256 SF hotel with 150 rooms and meeting space; 28,805 SF of restaurant space; 65,108 SF retail shops and 41 residential loft units.

 

AZRE July/August 2010