Hello 2011 – Office Space Market Update
January 01, 2011
Dear clients and friends of Bayshore Partners, welcome back from the Holidays and to 2011.
The office space market continues to rebound.
In most major and secondary markets landlord bleeding has moderated or stopped. Several institutional landlords have recently sold, at huge discounts, significant portfolios of buildings. As money center bank profits have helped some commercial real estate get re-valued, and lenders working with owners, we have not seen the massive commercial real estate defaults that were expected.
Regarding lease concessions for tenants in the market for office space, we are negotiating tenant obligations with various types of landlords ranging from institutional to mom and pop owners, and although they don’t have their “landlord swagger” back, the concessions available 6 to 12 months ago are different today. Rent abatement, construction dollars, options to control space, caps on escalations, etc., have all bottomed out and are just starting firm.
Corporate profits, company layoffs diminishing, and some employers starting to hire, are giving landlords the opportunity to stabilize their concession packages for great credit tenants and reduce their concession package for fair credit tenants.
If you want to commence a real estate initiative or explore options, please call or email us.
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