Posts Tagged ‘commercial’
Tuesday, August 31st, 2010
Voit Real Estate Services has just released it’s Mid 2nd Quarter 2010 Report for the Orange County Office Market.
Voit’s mid quarter reports compliment the traditional quarterly market reports by providing more frequent and accurate market data and forecasts for it’s real estate and corporate clients.
Click HERE to view Voit’s Mid 3rd Quarter 2010 Orange County Office & Industrial Market Report.
A brief summary for commercial office and industrial tenants:
“The good news: the recession is over, and general activity is picking up in all product types. The bad news: we continue to have an imbalance of over-supply of product vs. demand. Result: downward pressure on pricing will continue in some product types and submarkets.
Highlights for the Orange County office market include:
1. Vacancy Rates: Vacancy has stabilized at just over 18% and will remain flat until it starts to decline in Q1 2011.
2. Availability Rates (vacant space and sublease space): Availability has been declining since its peak of 24.5% in Q1 2010 will continue to do so through Q1 2010 an thereon.
3. Average Asking Full Service Lease Rates: Effective lease rates will continue to decline but at a slower pace (estimate another 5%), to approximately $1.97/SF by Q1 2011. Rates are expected to start rising steadily by mid 2011.
4. Owner/User sale prices: The median price per square foot is set to increase in 3Q 2010 from $150/SF, rising steadily thereafter.
5. Employment: a net loss of approximately 25,000 jobs is expected in Orange County for 2010, with a positive net gain of approximately 2,000 jobs in 2011.
6. 2010 will be a stabilizing year with market support indicators turning positive in late 2010 / early 2011.
Recommendations for Office Tenants:
1. Be aggressive on leasing. Lease rates are still decreasing somewhat on certain product types in certain locations. Recommend signing at least 3 to 5 year terms to reduce and fix long term occupancy costs.
2. Don’t wait for the good news. You’ll miss the bottom. We’ve hit it already in some submarkets. Execute no later than end of 2010 to reap the best deals before landlord’s get bullish and hold firm on rates/lease terms.
3. Renew early – any lease expirations coming due in 18 months or less should be addressed now to avoid a weak negotiating position in a strengthining market.
For more information or free impartial advice on what this information means for you and your business, contact Stefan Rogers at 949.263 5362 / srogers@voitco.com
Tags: commercial, corporate, forecast, Industrial, landlord, lease, leasing, market, occupancy, office, office tenant, orange county, orange county office, prices, Real Estate, reduce, Report, rogers, sale, services, space, sublease, Tenant, vacancy, voit
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Friday, August 27th, 2010
The Tenant Improvement cost, whether paid for all or in part by the landlord, or by the tenant, is typically the largest leasing cost in all commercial real estate transactions.
Keeping the T.I. cost to a minimum is essential to conserve valuable company dollars and knowing how much the T.I.’s are going to cost is critical in order to ensure every penny of savings is being negotiated by the tenant.
Valley Commercial Contractors, LLP, Voit’s construction and development company, has prepared the following matrix for estimating tenant improvement costs for various size ranges of office space:
The above matrix should serve as a useful guide to all tenants entering into lease negotiations. I hope it is of help.
For more comprehensive information or advice on office space tenant improvements and what you can typically expect from landlords in terms of T.I. allowances in various situations, contact Stefan Rogers at 949.263.5362 – srogers@voitco.com
Tags: commercial, commercial real estate, cost, improvement costs, lease, lease negotiations, leasing, negotiate, office, office space, office tenant, Real Estate, real estate transactions, Tenant, tenant improvement, tenant improvements, transaction, voit
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Tuesday, August 24th, 2010
Voit Commercial Tenant Solutions just closed a lease for approximately 8,000 SF of Class A office space in Irvine Concourse, Irvine’s premier office complex.
The leased space was approximately 8,000 square feet and the starting full service rental rate was $1.29 per square foot, arguably 40% below the fair market rental value for the property of approximately $2.20 per square foot.
While the negotiated rent is extremely low for Class A office product in Irvine, it is not representative of typical market conditions. However, anomolies like this occur on occasions for our clients to take advantage of and we are always ready to present these opportunities if we are aware of their needs.
For more information and similar opportunities, contact Stefan Rogers: 949.263.5362 / srogers@voitco.com. Alternatively, visit www.irvine-office-space.com to search all available office space for lease or sublease in Irvine, CA.
Tags: available, class a, commercial, irvine, lease, market, negotiate, office, office space, property, rate, rent, rogers, search, solutions, sublease, Tenant, value, voit
Posted in Real Estate Deals | No Comments »
Wednesday, August 18th, 2010
Looking for Available Office Space Listings for Lease, Sublease or Sale in Newport Beach, CA?
Most commercial real estate listings are not available online to the public. However, Voit subscribes to every commercial real estate listing service and provides free instant access to every available commercial office space for sale, lease or sublease in Newport Beach, CA. Click below to start searching every available commercial office space for sale, lease or sublease in Newport Beach, CA or call Stefan Rogers at 949.263.5362 for professional assistance and off-market listings.
Click Here to Search All Commercial Office Space for Sale, Lease or Sublease and Executive Suites in Newport Beach, CA.
Once you’ve found the perfect commercial office space for sale or lease in Newport Beach, CA, why not take advantage of our professional tenant representation services to negotiate your office lease or purchase, and guarantee you maximum time and money savings, while protecting you from real estate risk. We’ll manage the entire lease or sale process on your behalf and give you the impartial professional advice you expect, so you can remain focused on running your business.
Our expert tenant representation services are free. We share the listing broker’s fee, which is paid in full even if you don’t benefit from our tenant representation services. Furthermore, we have proven to save clients an average of 30% in rent and occupancy costs on every lease or sale, several times the full listing fee.
Our team of tenant representation brokers specializes in representing tenants and buyers in the sale or lease of commercial office space in Newport Beach. We possess the market knowledge and negotiating expertise every business needs to guarantee the best terms when renting or buying commercial real estate in Newport Beach.
The City of Newport Beach office space market provides office space listings for lease, sublease and sale. Class A, B and C office space listings in Newport Beach are available for lease in all size ranges and typically rent for lease terms of one to five years. Newport Beach office space for lease is also available in executive office suites, providing short term, flexible serviced office space for rent at a premium compared to the traditional Newport Beach office space rental market.
Click www.newport-beach-office-space.com to start searching every available commercial office space for sale, lease or sublease in Newport Beach, CA or call Stefan Rogers at 949.263.5362 for personal search assistance and off-market listings.
Tags: buy, class a, commercial, estate, executive, executive office, executive suites, lease, listing, market, negotiate, newport beach, occupancy, office, professional, purchase, Real, Real Estate, rent, risk, rogers, sale, save, search, serviced office, serviced office space, services, space, sublease, Tenant, Tenant Representation, time, voit
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Tuesday, August 10th, 2010
Orange County‘s 2nd quarter of 2010 office market data indicates definite signs of stabilization.
Last week, and for the first time in over two years, one of the premier landlords in Orange County increased their effective lease rates in the 2nd quarter. Additionally, a prominent Orange County developer increased their “bottom line” sale prices on their new office buildings. Although neither of these landlords increased their asking prices, they stood their ground and insisted on final terms more favorable to them.
While these occurrences’ remain the exception to the rule for the moment, it may be the first indication of a turnaround in lease rates. That said, most landlords are still managing their rent rolls aggressively, offering terms that remain very favorable to their existing tenants. For example, we recently negotiated several early lease renewals whereby the landlord offered to significantly reduce lease rates, provided free rent and a generous tenant improvement allowance for tenants who had substantial time left on their existing leases.
Let’s discuss how these factors play into your business strategy moving ahead. For the moment, it remains a “tenant’s market”. However, current conditions suggest that this may be short lived. So, don’t get left behind! Profits and are up for many major US corporations. For example, Ford Motor Company just reported a $2.6 billion dollar second quarter profit, exceeding even the most optimistic of expectations. Dozens of other companies have reported similar good news. This is evidence of drastic expense and personnel reductions over the last few years. Strong earnings and the resulting accumulation of cash on hand has precipitated a re-commitment to marketing budgets, which for most of Corporate America, were drastically scaled back as expenses were trimmed to survive the recession. This new spending, with its focus on growth, bodes well for the future. Job growth is the likely outcome as corporate revenues continue to improve.
Attached are links to the Voit Real Estate Services‘ Orange County Commercial Market Reports for the 2nd Quarter of 2010. They are simple to download by clicking the link below, though some of the high points are:
Vacancy is up but Availability is down: You may ask how that can be, but fewer spaces are available for sublease and the space that was available for sublease is now on the market directly from the Landlord;
Office and Industrial asking rental rates are down again: Office asking rates have come down another $0.06/sq. ft. this quarter and Industrial edged down $0.03/ sq. ft. The drop has flattened out compared to the nearly 35% drop from the highs of 2008;
Orange County employers are hiring: It may be a “jobless” recovery in other regions, but Orange County is beginning to hire. The unemployment rate has inched down from 9.5% to 9.3%. This is still nothing to cheer about, but it is good news that indicates a trend toward sustained economic recovery.
Click HERE to view Voit’s latest commercial real estate market reports.
For free, impartial advice on your corporate real estate strategy and solutions available to you for reducing your overhead and realigning your real estate with your business plan, contact Carter Harrington at 949 263 5396 / charrington@voitco.com.
Tags: commercial, corporate, Industrial, lease, market, negotiate, orange county, orange county office, prices, Real Estate, real estate market, reduce, rent, sale, services, solutions, space, sublease, Tenant, time, vacancy, voit
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Monday, August 9th, 2010
Office space in airport area: vacancy for low-rise space rose to 18.2% in second quarter.
With vacancy rates staying high for Orange County office space, landlords continue to be aggressive, offering substantial concessions and reduced lease rates to fill vacancies.
In the second quarter, vacancy rates for low-rise office space moved up slightly to 15.8% from 15.6% in the first quarter and 13.8% a year earlier.
However, OC’s overall office vacancy fell to 18.2% in the second quarter from 18.4%, and there was absorption for the first time since 2008.
Although challenges remain, tenants continue to benefit from the current office market conditions.
Low-rise office building lease rates declined with an average asking lease rate of $1.94 compared to $1.99 in the first quarter and $2.17 a year ago.
Lower lease rates are a contributing factor to more leases getting signed. Overall, tenants continue to reduce and control occupancy costs by disposing of excess office space by subleasing, negotiating a lease termination and relocating to more cost-effective space, or renegotiating their existing leases.
In addition to lower lease rates, landlords are offering more tenant improvement dollars, free rent and, in some cases, landlords are assuming a tenant’s existing lease obligations. These kinds of concessions present a tremendous opportunity for tenants to take full advantage of current market conditions.
Job growth is the key to growth in the office market. OC’s second-quarter unemployment rate was 9.2%, down from 9.8% in the first quarter. The county continues to post the lowest unemployment rate in Southern California and is far below California’s state rate of 12.4%.
Tags: commercial, landlord, lease, office, office space, orange county, orange county office, rent, space, Tenant, time, vacancy
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Friday, August 6th, 2010
One very common question clients ask us is “What’s the difference between Class A, Class B and Class C office space”, so I thought I should explain.
Commercial office space is typically categorized as Class A, Class B, or a Class C. The difference between these classifications does vary somewhat according to the local market and class B and C buildings are generally classified relative to Class A buildings.
Office buildings are bunched into these classifications according to their quality, amenities and general characteristics, but most differentiating factor between each three classes is that of price.
While there is no definitive formula for accurately classifying office space as the interpretation of the classes is somewhat subjective. However, below is a general description of each class:
CLASS A
Class A office buildings are the most prestigious and high-image office buildings in their marketplace with the best construction, competing for premier office users with rents above average for the area. Typically at least several stories high and accompanied by parking structures, Class A office buildings have high quality standard finishes and infrastructure, state of the art systems, exceptional accessibility and amenities and a definite market presence. Class A office buildings are also well-located, have good access, are professionally managed, and typically owned by institutional landlords. Class A office buildings are, not surprisingly, the most expensive. Currently, Class A office space in Orange County is typically leasing for as low as $1.80 per square foot full service gross up to over $4.00 per square foot full service gross.
CLASS B
Class B office buildings are typically low-rise versions of Class A office buildings, but lack the high-image and level of amenities and features, such as covered parking, that Class A office buildings have. They are generally well located and well managed and, compete for a wide range of tenants with rents in the average range for the area. Building finishes are fair to good for the area and systems are adequate, but the building cannot compete with Class A at the same price. However, Class B office space is generally considered the Currently, Class B office space in Orange County is typically leasing for as low as $1.50 per square foot full service gross up to over $2.00 per square foot full service gross and is generally considered the “best value” office space.
CLASS C
Class C office buildings typically encompass every building that does not fit into Classes A and B. Class C office buildings are low rise, often wood construction, older buildings, often located on the periphery of major commercial office centers. Class C office buildings often require extensive renovation due to their age and suffer from a degree of obsolescence in their infrastructure, which may not be suitable for certain tenants. They compete for tenants requiring functional space at below average rents that are so concerned with image or curb appeal. Currently, Class C office space in Orange County is typically leasing for as low as under $1.00 per square foot full service gross up to over $1.50 per square foot full service gross.
Tags: building, class a, class b, class c, commercial, landlord, market, office, office space, orange county, rate, rent, Tenant
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Friday, July 30th, 2010
As a commercial real estate broker, I’m often approached by landlords requesting that my clients pay larger security deposits or sign a personal guarantee in the event that they default as tenants. However, it’s no longer the tenant that can end up in default or in breach of their lease. Now it’s the landlord too!
The current weak economic climate and the number of landlords struggling to stay afloat amongst all their distressed assets presents a new set of challenges for commercial tenants. Landlord default is now a hugely important consideration for companies leasing or renegotiating their leases as it represents a major area of business risk generally not contemplated until recently.
With the leasing market in the doldrums and real estate prices still falling, many building owners are defaulting on their loans, have no cash at hand to manage their properties, perform tenant improvements and other financial obligations per their leases and even afford the fixed costs of leasing space to a new tenant.
So how do you, the tenant, determine which landlords to lease from and which to avoid and what extra steps does your real estate broker need to address in the lease to protect you from landlord default and the potential ensuing consequences?
Here are four important rules to follow:
1. Know the landlord
Before signing a lease, be sure your real estate broker has thoroughly researched the property and its owner. Ask to review the landlord’s current and historic financial statements if possible and ask your broker to request a property title report to confirm they are not in default on their loan payments. This will help you determine the landlord’s long-term financial stability and ability to service their debt. Also, ask your real estate broker about the building owner’s reputation. Just as the landlord will scrutinize your financials and operations as a prospective tenant, now it’s time to do the same to the landlord to ensure that when you do sign a lease you can do so knowing that it’s likely your lease rights will be upheld by the landlord.
2. Negotiate self-help or rights of recourse
In the current economy, a landlord in financial distress may reduce building services, maintenance or capital improvements to the property in order to save money. As a tenant, ensure the landlord is obligated in the lease to provide a very specific level of service. You also need to ensure that, if building services fall below the required standards, you have methods of recourse such as the right to off-set rent payments, terminate your lease, or hire someone to perform the work required at the landlord’s expense. Such rights can be difficult to negotiate for the smaller tenant however but they are important to ensure that your business can continue to operate properly in the event that your working environment is compromised.
3. Protect yourself against foreclosure
If you’re leasing space and the building enters foreclosure, you want your lease to remain valid and your rights as a tenant to be protected. As part of your landlord due diligence, obtaining and analyzing a title report to determine what, if any, loans exist on the property, is the responsibility of your real estate broker.
If there are loans in place, make sure your real estate attorney obtains a favorable subordination, non-disturbance and attornment agreement. This will offer you the protection you need in the event of foreclosure, particularly if you are investing significant money towards tenant improvements.
4. Protect tenant improvement allowances and other concessions
Landlords typically agree to pay for all or part of the tenant improvements by way of a tenant improvement allowance. Either the landlord undertakes the improvements themselves or the tenant is reimbursed by the landlord when the project is completed. If a landlord files for bankruptcy, you could potentially lose any outstanding tenant improvement reimbursement. To protect yourself, negotiate the lease or work letter to either place any tenant improvement allowance in a third-party escrow account, secure the allowance with a letter of credit or grant the tenant the right to off-set the unpaid allowance against future rent payments.
For more information on this subject, call Stefan Rogers at 949.263.5362.
Tags: building, business, commercial, cost, economy, financial, landlord, lease, manage, money, negotiate, owner, prices, property, rate, Real, Real Estate, reduce, Report, research, save, services, space, Tenant
Posted in Corporate Real Estate Strategies | 1 Comment »
Monday, July 26th, 2010
Orange County office and Industrial commercial real estate continues to stabilize
Voit Real Estate Services is has just released it’s latest 2nd quarter 2010 Orange County commercial real estate market reports for the office and industrial real estate sector. Voit’s 2010 Commercial Real Estate Market forecasts and a complete list of reports for Office, Industrial, Flex, R&D and Retail commercial real estate for Orange County, San Diego County, Riverside County, Los Angeles County and Las Vegas are now available at www.voitcts.com. Click HERE to view the reports.
Highlights for the Orange County Office Market are:
Vacancy – Up
Net Absorption – Down
Lease Rates – Down
Transactions – Flat
Construction – Down
While the above trend is similar to that witnessed in the 1st quarter 2010, we are experiencing a significant increase in transaction activity, a large percentage of which is likely a result of pent up demand from short-term lease renewals and also that new lease packages now offered by landlords are becoming very appealing to businesses. We are also witnessing a definite steadying in the decline in office rents, which have already stabilized in some sought after locations/building types. The vacancy rate and availability is also stabilizing.
All of the above indicates a clear turning point in the Orange County office market. However, while these are positive signs, there are no expectations of any thing but a slow and steady recovery through the rest of 2010 and into 2011.
Current market conditions continue to offer surprisingly cost-effective solutions for businesses to lease or buy office space in order to reduce overhead for the long-term and realign their real estate with their business plan.
Click HERE for a comprehensive forecast for the 2010 Orange County Office Market.
For more information or impartial advice on what Voit’s market data means for your business and how to take full advantage of the “Tenant’s Market” to reduce overhead and realign your real estate with your business plan, contact Stefan Rogers at 949.263.5362.
Tags: available, business, commercial, cost, forecast, landlord, lease, office space, orange county, orange county office, Real Estate, real estate market, recovery, reduce, rogers, San Diego, Tenant, vacancy, voit
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Monday, July 26th, 2010
A dramatic change in commercial real estate lease accounting will be released shortly, which is expected to have far reaching consequences for businesses.
Last month the U.S. Financial Accounting Standards Board (FASB), and the International Accounting Standards Board (IASB), issued an Exposure Draft of future lease accounting changes. The proposals represent significant changes and accounting for all leases of real estate and equipment, existing and new.
All business owners, CFO’s and corporate real estate decision makers should ensure they fully understand these changes and how they will impact their companies as the reality of new lease accounting rules approaches. Many will be faced with the daunting challenge of preparing their existing lease portfolio and reassessing the criteria for structuring effective leases in response to the changes.
For more information contact Stefan Rogers at srogers@voitco.com / 949.263.5362 or look out for our comprehensive post on the subject matter in a few days.
Tags: business, commercial, corporate, financial, lease, owner, Real, Real Estate, rogers, voit
Posted in Corporate Real Estate Strategies | No Comments »
