July Commercial Real Estate Service Advisor Update

My team and I are having a great month. As you are well aware the commercial market is weak with vacancy rates having increased substantially and rents having fallen approximately 40% from their peak. Please feel free to see our market report and blog for more details. 

http://www.cresapartners.com/newyork/documents/NewYork_Market_Report-2010-Q2.pdf

http://www.cresapartners.com/newyork/blog/

Many of you are asking how we are serving our clients and winning business in this difficult economic environment. The current market conditions are favorable for our customers since we only represent tenants. Tenants benefit from a weak market since they have a greater number of space alternatives and since rents are lower. Additionally, landlords are offering large incentives in the form of free rent and work to attract new tenants and to maintain their existing tenants. Thus, tenants have abounding opportunities to improve their real estate position.

We serve tenants by giving them an advantage in dealing with landlords and by allowing them to achieve maximum cost savings. Additionally, we work closely with them in developing an overall real estate strategy and allowing them to achieve their corporate objectives.   

Many tenants believe they can negotiate their own leases. However, this is not a wise strategy. Having a tenant advisor allows a company to maximize its real estate position since the advisor can explore options outside the building the tenant is located in. Moreover, a competent tenant advisor will know the market and the business aspects of a lease. Thus, a tenant can leverage its opportunities and maximize the benefits of lower rents.

Additionally, what many tenants fail to realize is the landlord has “hidden profit” centers. A tenant may believe they have negotiated a great rent price only to find out later about hidden costs associated with the lease which amount to a large percentage of the overall expense.

We estimate that many tenants pay 20-30% more than they should as a result of hidden costs associated with a lease. This includes, operating expenses, real estate taxes, tenant refurbishments, lease flexibility, right to audit, elimination of security deposit, landlord construction profits, re-measuring the space and base building issues.

If you are dealing directly with your landlord or the landlord’s broker you are most assuredly not achieving maximum benefits for your company. Neither the landlord nor the landlord’s broker will disclose “hidden profit” centers and you may be taken advantage of accordingly. 

We would enjoy meeting with you to discuss possibilities to lower your lease costs and to improve your company’s real estate position. Please feel free to contact me for a “gratis” lease analysis. We are confident that we can allow you to not only achieve but to exceed your real estate objectives. Thanks.

Comments

[commercial real estate in Houston Tex]

Representing tenants for estimating the leasing issues and development of the space or building. Just like what we have here in commercial real estate in Houston Tex. Thanks for the very informative post and great advice!

[Joseph Armano]

Your welcome!

[Poplar Bluff Real Estate]

Are commercial real estate prices destined for the same fate as what's happened in the housing market?

[Joseph Armano]

Commercial prices in Manhattan have turned up in the last few months as space is being absorbed. I would expect rent increases for next year.