San Diego Office Space Market is Great (if you’re a tenant)
Office Vacancy Rates To Soar
Without a major commercial harbor or a gateway international airport, the San Diego region has been hit harder than other major West Coast cities in the economic downturn, according to the Emerging Trends forecast. Despite San Diego’s warm climate and its attraction of high-tech and biotech jobs, office vacancies in 2010 are expected to approach 15-year highs. The housing market decline has hit local retail markets hard. However, homebuyers are expected to find good deals next year. Commercial investors are forecast to find similar opportunities by 2011 or 2012.
For wary local landlords and investors, the future remains disturbingly uncertain. San Diego real estate economist Gary H. London views 2010 as “a time of foreboding.” He expects the current decline to continue in San Diego County for two more years.
Search – Rofo.com
San Diego, CA Office / R&D Space Listings
Direct LeaseSan Diego – High Bluff Drive – Space for up to 25 people12707 High Bluff Drive, San Diego, 92130Furnished3,000 sqft$9,000 FS
Direct LeaseSan Diego – High Bluff Drive – Class A Space – Move In Ready12707 High Bluff Drive, San Diego, 92130Furnished500 sqft$500 FS
Direct LeaseSan Diego – High Bluff Drive – Cost Effective Office Membership Program12707 High Bluff Drive, San Diego, 92130Furnished150 sqft$110 FS
Direct LeasePLUG & PLAY Below Market Office Condo – For Lease5830 Oberlin Drive, San Diego, 921211,900 sqft$2,470 FS
Direct LeaseOffice Space For LEASE – Below Market Rate4858 Mercury Street, San Diego, 921111,209 sqft$1,632 FS
Direct LeaseOffice Space Below Market Rate4858 Mercury Street, San Diego, 921111,053 sqft$1,422 FS
Direct LeaseWindow Line HIGH IMAGE OFFICE – LOW MARKET RATE4858 Mercury Street, San Diego, 921112,100 sqft$3,045 FS
Direct LeaseLa Jolla Medical and Surgical Center8929 University Center Lane #100, San Diego, 921221,134 sqft$4,105 NNN
Portland, Oregon Office Space
Portland, OR Office / R&D Space Listings
Direct LeaseWorld Trade Center – 11th Floor121 SW Salmon Street, 1 World Trade Center, Portland, 97204150 sqft$480 FS
Direct LeasePortland Congress Center – Suite 11001001 S.W. Fifth Avenue, Portland, 97204150 sqft$480 FS
Direct LeaseSunset Business Park 9400 Building #1009400 SW Barnes Rd, Portland, 972259,649 sqft$17,658 FS
Direct LeasePeterkort Centre Peterkort Centre I #2559555 SW Barnes Rd, Portland, 972253,898 sqft$10,720 FSDirect LeasePeterkort Centre Peterkort Centre I #3709555 SW Barnes Rd, Portland, 972251,055 sqft$2,901 FS
Office Space Leases – What to know about Security Deposits and Letters of Credit
Letters of Credit: Plain and simple, a letter of credit is a bank’s promise to pay a certain amount that’s owed by a tenant or a borrower. Banks issue letters of credit as a way to ensure sellers that they will get paid, as long as they do what they’ve agreed to do. This is usually a more common route for small business owners or startups with not a lot of business history or revenue. This also appeases a landlord who is considering a startup business with limited revenues or credit for an office lease.
When a tenant gets a letter of credit from the bank, it basically performs the same thing a personal guarantee. If the tenant defaults on its rental payment, the bank takes over and begins to paying rent to the landlord. It is basically the same thing a personal guarantor would do, with the exception that it is a bank.
Increased Security Deposits: Landlords will forego the personal guaranty if they feel comfortable with the tenant’s business plan, plus an increased security deposit usually makes them feel comfortable that if the tenant goes out of business, they have this additional money to count on while they get the space vacated and re-leased to someone else. Another good thing about increased security deposits is that you can negotiate with the landlord certain things like having a portion of the deposit burn-off as prepaid future rent, provided you don’t miss a payment the first or second year, etc.
Things to keep in mind: Letters of credit diminish an existing line of credit, and are reflected on the contractor’s financial statement as a contingent liability. Having assets tied up are counter-productive to both the owner and contractor. The business owner’s cash flow in funding initial stages of construction and retention amounts throughout a contract term can be adversely affected when liquid assets are pledged to a bank or the bank reduces its borrowing capacity as a result of the issuance of a letter of credit. Also, increased security deposits may tie-up your starting capital and put strain on your cash-flow.
Manhattan Providing Cheap Office Space for Startups
When Lindsay Napor expanded her Manhattan-based development company earlier this year — moving out of free work space provided by an investor — she turned to the most logical place for the company’s new offices: New Jersey.
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Katie Orlinsky for The New York TimesLindsay Napor and Joseph C. Grano of Ecological, a development company that specializes in sustainable construction. The firm pays about $4,000 a month in rent for its Varick Street office.
“We were planning on moving out of New York,” Ms. Napor said, “because to go from nothing to standard New York rents would have been a nonstarter for us.”
The company, called Ecological, which specializes in sustainable construction, had four employees, but planned to add 35 to 40 people in two years. “We were actually looking at space in Newark, because it was easy to get to for most people, and much cheaper,” she said.
Then, Ms. Napor heard an announcement during a Yankees game that changed the course of her business career. She learned that the city was soliciting fledgling companies for a new program that provided cheap office space in a business incubator.
Since June, Ms. Napor and other Ecological employees — now numbering a dozen — have worked out of two offices and 10 cubicles at 160 Varick Street at Vandam Street in SoHo.
Ecological pays about $4,000 a month in rent — or about one-quarter of what the company would have paid in Newark. “This has allowed us to focus on growing the business rather than on how to afford our rent,” she said, “enabling us to hire more people more quickly to get the business off the ground quicker.”
The 16,500-square-foot incubator, using one floor of the Varick Street building, serves 27 fledgling companies — 22 housed in the space and five companies with offices elsewhere that use its services, including a receptionist, meeting rooms and a mailing address. These companies are in a range of businesses, including information technology, communications, real estate development, fashion and film.
The incubator space is being provided at cost by Trinity Real Estate, and it is leased and managed by the Polytechnic Institute of New York University, the college’s school of technology. Polytechnic pays only maintenance and operations costs. It, in turn, covers its expenditures through the rents it charges the companies in the buildings.
Seth W. Pinsky, president of the New York City Economic Development Corporation, the city’s business development arm, said the economic recession had offered the perfect opportunity for the city to initiate the incubator, using $100,000 in seed money. Three more incubators in other sections of Manhattan, including one for the food industry and one for fashion, are to open soon, and a handful are in the planning stages in other boroughs.
Bruce Niswander, the director of New York University’s Office of Innovation Development, is in charge of running the incubator. He said a number of students from N.Y.U. and other universities work at companies there. They are paid by the university, and the companies are billed for the students’ hourly services.
“Small businesses typically have a difficult time hiring full-time people, so this arrangement eliminates that problem,” Mr. Niswander said. “It gives the businesses access to extreme talent that they otherwise wouldn’t have, and for the students, it’s a much-needed type of training and education outside the classroom.”
Mr. Niswander is not an unabashed advocate of incubators. Many, he said, fail to realize their goal of enabling companies to grow and thrive. “You can go to a lot of incubators, and if it’s not done properly — if it’s just real estate — the tenants have been there four, five, six years,” he said.
At 160 Varick, fledgling companies are allowed to lease space in blocks of no more than six months, and these leases are renewed only if the businesses meet agreed-upon targets.
Another key for a successful incubator is to choose companies ripe for growth, Mr. Niswander said. The Manhattan venture selected only 27 of more than 300 applicants. The goal is for those companies to move into the wider marketplace in 18 months.
“We pick companies specifically for their potential to add employees,” he said. “Adding employees means you quickly have more need for space than you’ve got room for here. If you get funded for that growth, then you’re on your way, and you really don’t need this environment.”
The incubator also offers training seminars for business owners, as well as networking opportunities with venture capital sources and potential clients to nudge companies along, said Micah Kotch, operations director with N.Y.U.’s Office of Innovation Development.
“We don’t want to be competing with commercial office space providers,” Mr. Kotch said. “Our mission is to help a company here find a market for their product.”
Some companies may end up modifying their product or service. For example, rather than initiating new development, Ecological now primarily serves as an outsourced sustainability department for the owners of real estate portfolios, Ms. Napor said. One client is the Hampshire Real Estate Companies, which owns and operates 259 properties.
“Using the knowledge we have in sustainability, we can help building owners as a strategy in their portfolio to increase the value of those assets,” she said.
Exploiting that niche, Ecological has landed $2 million from investors, which will help finance a future move, Ms. Napor said. Ecological is beginning negotiations with Trinity Real Estate about taking office space in one of its market-rate buildings.
Carl Weisbrod, Trinity’s president, said his company offered the three-year lease for the incubator after a lease fell through, but also in the hope of creating opportunities for New York City businesses.
“It’s not only in the interests of the city of New York, but clearly in the interests of real estate owners generally,” Mr. Weisbrod said. “We like to see businesses grow in the city and occupy more and more space.”
David Lombino, a spokesman for the city’s Economic Development Corporation, said the city hoped to end its participation eventually, after the incubator survived beyond its three-year lease at 160 Varick.
“Ideally, we would prove that the model is sustainable and wouldn’t need city involvement at a certain point,” he said.
Sign in to Recommend More Articles in Real Estate » A version of this article appeared in print on November 11, 2009, on page B7 of the New York edition.
New York City Office Space – Interesting trivia about the Chrysler Building
Taking Questions
Ask About the Chrysler Buillding
David Stravitz, the author of “The Chrysler Building: Creating a New York Icon Day by Day,” responds to readers.
Following is the first set of answers from David Stravitz, the author of “The Chrysler Building: Creating a New York Icon Day by Day.”
We are no longer accepting questions for this feature.
The Chrysler Building is magnificently unique however viewed, near or afar.
Who owns and operates it now? Are there ever guided tours for people who don’t normally have business dealings that bring them into this New York City landmark/treasure?
— Posted by Perley J. Thibodeau
In the summer of 2008, Tishman Speyer Properties sold 90 percent ownership of the Chrysler Building to the Abu Dhabi Investment Council. The price was an estimated $800 million. Speyer and Travelers Insurance purchased the building for $220 million in 1997. Before that, it was owned by Jack Kent Cooke. It has been a very long time since the family of Walter P. Chrysler owned the building (1947). Although Speyer only owns 10 percent, it continues to be the managing agent.
I do not believe there are guided tours, and if there were you would not see the 71st floor observatory, or the old Cloud Club (Floors 66-68) since each has been long since demolished. You can, I believe, walk in the lobby and maybe take a peek at the restored elevators from a distance. Kind of sad, don’t you think? The topmost floor, the 75th, is — are you ready? — occupied by a dentist.
What’s happening with the Cloud Club? I’ve read at various times over there last few years that there was interest in opening it to the public again, but nothing ever seems to happen. I was fortunate to see it for myself a few years ago. It’s an incredible space and unlike anything else in the city. I can’t help but believe it would be an instant hit.
— Posted by Michael Califra
A few years ago (about 2002), I was invited to a party up there and viewed what was left of the old club’s three floors (66th, 67th and 68th floors). Absolutely nothing is left, since it was demolished in the late 1970s. At the time, the space had undergone some renovations (plumbing and electrical) and all the walls were bare white. It was a “vanilla box.” Their intention, I believe (best guess), was to use it for social functions and subsequently rent it out as office space.
What transpired between then and now? I do not have a clue. I cannot imagine it being another club.
My opinion of the Chrysler Building is that it is the most exuberant and beautiful building in New York City, and perhaps in the world. I have been disappointed not to be allowed in to see inside the building in the post-9/11 world. (The last time I tried was 2003, however, so maybe things have changed?)
Is there a way to get in, individually or as part of a tour, to see the inside of the building?
— Posted by as
There are no tours to my knowledge. It is sad, but after 9/11, the Chrysler once again reigns as New York’s second-largest skyscraper after the Empire State Building. But back in December 1929 (a few months before completion), it was for six months the world’s tallest man-made structure.
Did Chrysler ever have a significant presence in the building? If so, when did it move?
— Posted by Greg
Yes, Walter P. Chrysler kept an office as well as an opulent huge private apartment on the top floor. The quarters had a lavish dining room, and at the time, he was proud to boast of having the highest toilet in Manhattan.
It was his intention to have the Chrysler Building, at 42nd Street and Lexington Avenue, become headquarters for the car company, but that never did happen. In fact, he seldom visited the apartment and remained mostly in Chrysler’s headquarters in Detroit.
Oh, how wonderful to know this man is around! I can remember the cars on display, the paneled elevators and the lounge at the top, where I enjoyed a drink. Thank you, sir!
— Posted by Miles, Naples, Fl
Of course, you are referring to the Chrysler Salon on the street floor. There you would see the latest year models of gleaming Chryslers, Plymouths, Dodges and the long-since-discontinued DeSoto. DeSoto was just under Chrysler and considered a “poor man’s Chrysler.” Old DeSotos are very desirable for collectors these days.
Passers-by would see many of these cars turning 360 degrees on revolving platforms.
Please explain connection between Chrysler Building and Cooper Union. Is there access to the top of the spire?
— Posted by R.
The Chrysler Building sits on grounds owned by Cooper Union, which represents an endowment for the college. Instead of paying property tax to the city, the Chrysler Building pays Cooper Union, which is tax exempt. As such, even though the Chrysler Building would, like any other commercial structure, be paying real estate taxes, not a single dollar in taxes has gone to new York since its construction. Cooper Union acquired the property in 1902, and has so far upheld its tax-exemption status going back to a charter that dates back to 1859 when it was founded.
Why was the current landlord permitted to demolish the beautiful, historic Art Deco speakeasy that was built on some of the uppermost floors of the building?? As I understand it, this was destroyed to make way for office space. So sad.
— Posted by JoeBoy
Actually the Cloud Club was demolished not by the current landlord (now Abu Dhabi owns 90 percent), but by maybe four previous owners or more. Best guess, it was demolished in 1971 for economic reasons. This was the time the building was really falling into serious disrepair. Instead of preserving a gem of a landmark, just like the destruction of Pennsylvania Station, they decided to “trash it” for goodness’ sake. There was nothing to protect it, and that’s so unfortunate. “Gone in 60 seconds.” It’s all about the bottom line. How unfortunate!
I have wondered how as this iconic building ages its oddly shaped windows in the scalloped arches are kept waterproofed and functional after decades of punishing weather and changing temperatures.
— Posted by Larry Ray
Due to leaks in the spire, the building has had extensive renovation. However most of the many windows were fine. Restoration of the spire was finished in 2002.
This structure has had serious waterproofing problems over the years. While the SS skin looked great from below, it had it’s fair share of water problems. In the past 10 years, there’s been some serious repairs to the ever-leaking problems. Finally, they’ve got it under control. While the stainless steel crown looked great, it unfortunately leaked. It’s taken a very large and costly effort to get it under control. It should be noted that the SS crown was custom fabricated from two sheet metal shops right inside the building. Every cut of the stainless steel was done by hand and nailed onto the structure, and over time they leaked. Correcting this required a huge undertaking. This masterpiece of design needed serious attention. In the end, it was worth it.
Where did the African marble in the lobby come from? Also, is it true there is a bathroom in the very top of the tower?
— Posted by Don
Much of the slabs are Moroccan rouge flamme marble streamed with white and other colors. They were used to line the walls of the main concourse. The elevator lobbies are framed in amber Mexican onyx, and the floor is tiled in sienna travertine.
Walter Chrysler insisted on having the highest bathroom in the world. He succeeded for six months. Was there a higher bathroom in the Empire State Building? Must have been! So for at least six months, until perhaps the early part of 1931, his throne was the highest in the world. His throne was unseated (pun) after 15 minutes (six months) of fame.
Along with the Empire State Building, these buildings are in my opinion true, realized ideas of what architectural icons are. Buildings that come to be loved over time and through their uniqueness. Whether it be the style, scale, or meaning. I know the times are different and the ideas of what an architectural icon is has changed, but I cannot ignore the feeling I get when I see such buildings compared to the forced symbolic buildings architects try to create today. It becomes more about the big shot’s name than the actual architecture and building itself. These buildings were pure architectural statement on not just the city scale or the country, but on a universal scale for all to see and know. I love this building.
— Posted by Lukas Argyros
The Chrysler Building is unlike any other building in the world. Built and completed in 14 months (1929-1930), it looks like it’s visiting this otherwise uncivilized planet. And unlike the Empire State Building, which is far superior to most boxy buildings of today, the Chrysler is a customized structure. In other words, it was hand fabricated from scratch. The flush windows, the stainless steel crown, the spire, the eagles — these were all fabricated from sheet metal shops on the 65th and 67th floor. While the Empire State is a gem of a building, it nevertheless came together from standard existing stock items taken from catalogs. The Chrysler was sculpted virtually by hand. Most of the rest of the buildings of today are boxes that capitalize on maximizing space in exchange for beauty. The Chrysler at 80 is eons ahead of its peers. It’s still the ruling “king of skyscrapers.”
From what material is the famous facade constructed? How is it maintained?
— Posted by Harvey Kaufman, MD
As it says on one of the original Chrysler Building construction 8×10 negatives in my collection, and on Page 108 in my book, the steel facade is “Constructed of Enduro-KA2 and Rezistal/Stainless Steel.” And that also includes the eight eagles.
What buildings were on the site before construction began on the Chrysler Building? And, yes, is there a tour of the building available?
— Posted by Lyn in PA
A four-story structure built in 1880 and owned by Brooklyn politician and real estate developer William H. Reynolds. Reynolds was a key developer in Lido Beach in Nassau County.
I don’t believe there are any tours. And if there were, what’s left to see up there? Both the observatory and the Cloud Club are long since gone. The lobby and the 32 restored elevators are gorgeous, but that’s about it.Who currently has the office at the very top of the building with the four windows on each side?
— Posted by Steve
To the best of my knowledge, it was occupied by a dentist. Imagine that at that height, you could feel the structure swaying. Ouch!
San Francisco Property Manager Micah Bycel On Why He Uses Rofo
Property manager Micah Bycel of Metrovation in San Francisco sits down with Rofo and explains why he uses the site to market commercial space online.
What Micah likes about Rofo is that it produces quality tenant leads and is a great platform for listing spaces and connecting with prospective tenants online.
Interview
Is Rofo a good marketing tool?
Yeah, Rofos been great. It’s given us an ability to outsource part of our obligation in terms of getting our listings out to the world. We’ve found Rofo to be extremely reliable in putting our listings out there.
Does rofo generate quality leads?
Yeah, I think the first three leads we got, two of the three closed deals with us.
Is Rofo.com easy to use?
Absolutely, I mean the interface is really easy to use, so uploading the listings and everything is really easy and then its sort of taken over from there which is great. So, in terms of how it works in the deal, we’ve found it to be very clear and easy.
Does the Rofo craigslist flyer work well?
Yeah, I mean I think Rofo does a good job of walking that line between too fancy and you know, just sort of random text in craigslist. And so I think it presents a presentable flyer, but that doesn’t overload you with information that people don’t care about, and makes it very easy to read.
The future of commercial leasing?
Yeah, I think the commercial real estate world in general has been slow on the uptake in terms of technology changes. I think Rofo is probably at the forefront of it, we’ve been posting on craigslist for a long time, but I think what we’re doing now with Rofo in our overall strategy is sort of figuring out where are the leads going to come from. For example, is Rofo going to take care of internet leads, and the brokers will take care of leads from the brokerage community. I guess the short answer is I still think its just all getting sorted our right now.
Would you recommend Rofo?
Yeah, definitely. We’re using it as part of our platform to get our listings out. We still rely primarily on our brokers to list a space, to get it out in the brokerage community, to do tours and to bring us deals. But, we’ve found Rofo to be a really reliable component to our leasing strategy.
Colliers Walnut Creek Commercial Broker Eric on why he Uses Rofo
Rofo sits down with Colliers Walnut Creek office & industrial broker Eric Erickson. He explains why he enjoys using Rofo and how it helped his brokerage business.
Eric does a good job tracking where his leads come from and is observing a decline in sign calls while leads coming from online sources like Rofo and craigslist continue to increase. He’s also seen newspaper advertising decline in importance as online listings services continue to proliferate. Obviously, a fundamental shift is occurring in how people search for commercial space. More and more people are using an online resource to find their space and even in a down market leads from the internet are increasing while sign calls are decreasing.
Eric thinks Rofo is a great commercial space listing service and highly recommends it to other brokers with small listings. “Rofo’s been worth the money, and I think if a broker is not using it they’re losing money, and they’re losing leads.”, explains Eric.
Interview
My Name is Eric Erickson. I’m and office industrial broker out of Walnut Creek Colliers.
How long have you used Rofo?
I’ve Been using Rofo about a year and a half, two years now and I market a lot of small spaces for my clients and it’s been a good vehicle to market small spaces.
Has Rofo generated tenant leads?
Yes, Rofo has provided us a way to expose our properties like we haven’t before. Over the last couple of years, I’ve been tracking sign calls and the different ways that the tenant leads come in. Rofo has been on the growth, sign calls are down, but Rofo’s up.
Is Rofo’s craigslist posting feature useful?
Absolutely, before we used to, obviously, advertise in the newspaper, but as craigslist became the classified ads online, newspapers became less important. But craigslist, ads fall off craigslist, and Rofo has an excellent feature to keep your ads on craigslist until you change it. So its an excellent listing service to use if you want to attract tenants through craigslist.
Is the Rofo site easy to use?
Yeah the site’s pretty easy to navigate and load up your information. It works really well going the other way from the tenants perspective, they go through and they either can find us through craigslist or the Rofo site.
Would you recommend Rofo?
Absolutely, Rofo has been worth the money and if a broker’s not using it, they’re losing money, they’re losing leads.
Feature of the Week: Rofo Space Needs
One feature on the Rofo site that is incredibly useful to both prospective tenants and space providers is the Space Needs section. It allows businesses looking for space to post their exact requirements, i.e. space size, what city, preferred move date, company type and other requirements.
For busy small businesses owners, this allows them to save time by posting their need and then accepting or rejecting the offers they receive. It reduces the time a small business owner has to spend searching for space.
For space providers, the system provides an easy way to connect with potential tenants. The process for proposing a space is quick and painless and you will be notified via email when the tenant accepts or rejects the proposal. When proposing a space it is best to be mindful of the tenants needs and not propose a space in a city miles from where they are looking. Space providers also can sign up for “Space Needs Alerts”, which notify them through email when a Rofo user has posted a space need similar to a vacant space they have listed.
Norman Describes Using Rofo to Lease Commercial Space
Local Oakland building owner Norman Eggen describes his success using Rofo to lease commercial space. After listings his spaces on Rofo, Norm began to receive quality tenant inquiries and was able to fill half his building with Rofo users. Norm specifically like that Rofo helps fill a niche for marketing smalls spaces. The problem that Norm has witnessed is that brokers sometimes avoid working on small deals, so Rofo is a great platform to get small commercial spaces leased.
Interview
I’m Norm Eggen, I’m the owner along with my wife of this building at 4721 Tidewater Ave. in Oakland. The reason I’m doing this for Rofo, they’ve been instrumental in helping me find fifty percent of the last tenants I’ve had for the park. They’ve been providing a good service to me to me at what I figure is relatively cost effective basis. And they have brought tow tenants who are right now in the process of finishing up their tenant improvements.
How does Rofo compare to other online resources
Well, one thing I probably should say, and could say for your benefit is the other servives I’ve gotten zero prospects out of it, and the prospects have come from [Rofo]. Brokers working in this area don’t like to work on smaller tenants like this, so Rofo fills a gap to help bring in tenants in the smaller end of the user spectrum.
Would you recommend Rofo?
Yeah, I can strongly say that I would recommend Rofo to other people that have similar types of space they want to lease, or perhaps sell and in fact I have recommended them to more than one other building owner already, so it’s a good service.