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THE STATE OF THE CBD OFFICE MARKET – Q2 2013
This entry was posted in Commercial Real Estate, Market Statistics, SQUARE FEET. Bookmark the permalink. |
THE VALUE OF A LEASE COMP
Using lease comps to assist a client in understanding where their lease economics should end up at the end of a negotiation needs to be reviewed. Prospective clients are told how important it is for a brokerage firm to have these details – and lots of them – to use in helping establish their negotiation end-point.
“Hogwash!”, I say.
Leverage is what establishes the bottom of the barrel economics with landlords not lease comps.
Every deal is unique, every client is unique. Reliance on lease comps is a poor substitute for applying a process that drives the outcome. Even if you could standardize the transaction details, all a comp represents is a unique set of conditions in a single moment of time that cannot easily be generalized to any other deal. You get all you need to know about where prices are going by looking at asking lease rate trends, applying a process to create leverage and letting the process drive the outcome.
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This entry was posted in Commercial Real Estate, SQUARE FEET, Uncategorized. Bookmark the permalink. |
GLOBAL MANAGEMENT SERVICES SIGNS A NEW LONG TERM LEASE AT ONE NORTH LASALLE STREET
Chicago, IL – November 11, 2011 – Chicago-based event managing service Global Management Services, Inc (GMS) recently signed a long-term lease for new office space at One North LaSalle Street in Chicago.
GMS had been a tenant at 360 North Michigan Avenue for over eleven years and had a good relationship with its landlord. However, their space was in need of updating and required modifications to continue to meet their growing operational needs. With the assistance of Bella Terra Partners, a commercial tenant representation firm, GMS was able to move into a sister building of 360 N Michigan Avenue, One North LaSalle Street, owned by the same landlord. “The space offered at One North LaSalle Street had perfect existing conditions, was double the size and included furniture that would become vacant at exactly the time GMS required this space.” said Rhea Campbell, Founding Partner of Bella Terra Partners who represented GMS. “Not only that, the negotiated transaction fit well with GMS’s business goals and was a shorter negotiation process because of the long term relationship of the tenant and the landlord. The landlord gets to keep a solid business in its portfolio of Chicago owned assets and the …
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This entry was posted in Commercial Real Estate, Completed Transactions, New Lease. Bookmark the permalink. |
THE STATE OF THE CBD OFFICE MARKET – Q3 2011
This entry was posted in Commercial Real Estate, Market Statistics, Tenant Representation. Bookmark the permalink. |
LOAN DELIQUENCIES INCREASE BUT SO DOES CHICAGO’S EMPLOYMENT FORECAST
This entry was posted in Capital Markets, Commercial Real Estate, Loan Delinquencies. Bookmark the permalink. |
WHEN IT COMES TO YOUR OFFICE SPACE, IS IT REALLY BEST TO JUST “STAY PUT”?
In the last few years we’ve helped our clients renew their office leases more often than we’ve helped them acquire new office leases. Why, you ask? Some of our clients have thought it too risky to move to another location and commit to a longer lease, complete a full interior build out, and interrupt their business operations; others have simply opted for the path of least resistance at a time of great uncertainty about the future. Some have found themselves with reduced credit capacity, which has made acquiring new office space and posting a Letter of Credit difficult or impossible. Others have simply not had the mental capacity or human capital to think long term about their business, brand, and talent needs.
BUT, IT’S EASY.
The landlord has made these types of transactions relatively easy and attractive to these tenants by crafting, in partnership with the tenant’s professional, “blend and extend” solutions. “Blend and extend,” as it’s known in the office leasing market, is the name given to the process by which a landlord renews a tenant with unexpired term on their lease by blending the unexpired term with the new term. The tenant is happy because they …
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This entry was posted in Commercial Real Estate, Landlord Financial Issues, Lease Renewals, Tenant Representation, Workplace Strategy. Bookmark the permalink. |
MARKET REVIEW: Q1 2011
At a glance…
- Chicago office vacancy remains above ‘equilibrium’ by four points (14.4%), yet virtually unchanged from the previous quarter.
- Rental rates continue to soften, slipping to $28.30 per rentable square foot (rsf), a decrease from last quarter’s $29.25.
- Landlords continue to be aggressive in negotiating to retain existing tenants.
- The bulk of market activity involves flight to quality in the leasing market with tenants taking advantage of historically low pricing.
- Office space absorption figures suggest a slight increase in overall demand and leasing activity. Absorption is positive 80,622 rsf for the quarter, compared to the previous quarter of negative 27,582 rsf.
- Sublease vacancy decreased to 2,511,330 available rsf from 2,658,482 available rsf
- Many companies have excess, underutilized space. The bulk of this ‘shadow space’ must be absorbed before a healthy market returns
Issues impacting Chicago office space, and many other markets, include: high unemployment, housing foreclosures and weak pricing, stagnant economic growth and diminished financial reserves of the small business.
We expect the recovery to move slowly for commercial office space in Chicago.
Major transactions this quarter:
- Groupon at 303 E Wacker (150,000 rsf short term sublease expansion)
- PNC Bank at 1N Franklin (116,000 rsf renewal/expansion)
- University Health Consortium at 155 N Wacker Drive …
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This entry was posted in Commercial Real Estate, Market Statistics and tagged Chicago, Chicago Business District, Commercial Real Estate, Downtown Chicago, Market Statistics, Office Leasing Conditions, Q1 2011. Bookmark the permalink. |
WHY HIRE A COMMERCIAL TENANT REPRESENTATION PROFESSIONAL?
This entry was posted in Commercial Real Estate, Tenant Representation and tagged Commercial Real Estate, Lease Renewals, New Lease, Tenant Advisor, Tenant Representation. Bookmark the permalink. |
US GOVERNMENT REPORTS FINANCING FRAUD IN COMMERCIAL REAL ESTATE
A recent report released from The Financial Crimes Enforcement Network, a part of the US Department of Treasury, outlines the rising amount of suspicious activities in the Commercial Real Estate Industry. Between 2007 and 2010, the amount of Suspicious Activity Reports (SARs) regarding Commercial Real Estate financing fraud nearly tripled. The top 4 categories for these frauds were: false documents, misappropriation of funds, collusion-bank insider, and false statements. And, the top 5 locations of the reported subjects were: Georgia, Illinois, Florida, New York and California. In the last few years, commercial rents and occupancy rates have fallen and commercial loan defaults have risen. An estimated $1.4 trillion in Commercial Real Estate loans will reach the end of their terms by 2014. As financial institutions fear more loan defaults, they will be keeping a keen eye out for these kinds of suspicious activities.
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This entry was posted in Commercial Real Estate, Landlord Financial Issues and tagged Commercial Real Estate, financing fraud, loans. Bookmark the permalink. |
