Find good deals in a bad market!

Nationally, the commercial real estate leasing market is struggling. There are less companies looking for space, and more companies defaulting on their leases. What does this mean to you as the small business? Below are some of your options:

Executive Suites: The spaces typically range in size from a one person cube to a single office to space for four people. A small business pays a monthly rent and the Executive Suite operator provides the space, phone service, internet connectivity, printing services, phone, fax etc. You are typically allotted a certain amount and charged more depending on your needs. You have the opportunity to use their facilities world wide. These facilities are best for individuals who are not based near their companies office, true start ups looking for short term lease, and those looking for the added services of a large firm while operating on your own

Shared Offices: These spaces are usually situations where a local company has too much space and needs to have an outside company move in. There needs to be good synergies between the companies for this to work. Some common examples would be lawyers and therapists sharing offices. What typically doesn't work is sales based companies and engineering based companies. Some amenities are typically shared but it is negotiated between the each company. These spaces are typically the most affordable and flexible. They are tough to find and do not work for many industries.

Subleases: When a company no longer needs a location and has not defaulted on the lease, the company will attempt to sublease their space to another company. Subleases typically come furnished and wired for data and will be on the market for roughly 50-75% of the current market value for space. Sublandlords will expect a subtenant to take the space for the entire term of the lease and will rarely do any changes to the interior layout. When a sublease has less than 1 year remaining it value diminishes drastically. This is where the best deals can be found, but the landlord will negotiate the rent to current market rent at the conclusion of the sublease. These spaces provide the best deals in the market but can be hard to find the right one.

Direct Space: These spaces are rented directly from the owner. Most direct leases are 3-5 years but certain owners will consider less lease term. Small businesses have the opportunity to work with an architect to design a space to their exact specifications and the cost of the build out is typically shared by the small business and the landlord. In times when vacancy is high (like now), the landlord will usually pay for all improvements within reason. The spaces are priced the current market and competitive buildings in the area. These spaces provide the ability to create a perfect space for your business, but it typically takes a more mature business or a flexible landlord to make the types of space work for a small business.

If you have any questions, please email sales@rofo.com

Last updated: 03.06.2009 04:34 PM

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