Occupancy Rates Decrease For Office Space Nationally
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If you are looking to expand your business and need space, this is a great time to start negotiating with your landlord. With occupancy rates declining and rents remaining neutral in the 3rd quarter, landlords are getting nervous.
Add to that the tremors of a recession in the horizon and all the trouble on Wall Street, it is a great time to get in and renegotiate your lease. And if you are an out of the box thinker when it comes to office space, check out this post by Tim Ferris on a company that has redesigned their work environment. They have seen some amazing cost savings and productivity enhancements.
Rent stagnation and increasing vacancies put “strain on borrowers to make payments on mortgages,” said Sam Chandan, Reis’s chief economist. “It hasn’t shown up yet in terms of delinquency rates, but this is clearly an issue we need to be very attentive to,” he said. Almost every type of financial institution, from community banks to Wall Street, lends to office-building owners.
The office market in suburban areas and smaller cities has been declining throughout the year. But now, with a recession looking inevitable, the pain is spreading to most large metropolitan areas. Previously immune cities such as San Francisco and Boston saw vacancy-rate increases in the third quarter. San Francisco’s vacancy rate rose 0.6 percentage point to 9.9% in the quarter. Boston’s rate rose 0.8 percentage point to 11.7%. via WSJ.com
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Comment by ADB on 4 October 2008:
absolutely true for large tenants in the Bay Area. Landlords won’t be dropping rents yet but they will start offering more concessions like free rent, options and better tenant improvement packages (provided they have the credit).
Thanks,
Alan Bernier, Rofo – San Francisco Office Space
Comment by Office Partitions on 15 January 2009:
well, he said it and he was right. it’s true. Almost every type of financial institution, from community banks to Wall Street really does lend to office-building owners.