A glimpse and what’s happening with rental rates:
No doubt that most, if not all of us are feeling the repercussions of a falling economy. Residential real estate was the first to feel the effect…and now commercial real estate.
While sales are slow and auctions are on the rise for high-debt and foreclosed properties, there is a light at the end of the tunnel…especially if you are a tenant or a buyer.
Rental rates are reaching a slump, and as businesses are closing or downsizing, we are seeing an increase in availability. This is causing owners to pay more and more out of pocket expenses because although no one may be using the space, owners have to pay for taxes and operating expenses on all their vacancies. What does this mean to tenants? Lower rents! Owners are willing to accept lower base rents in order to get users into their vacancies just so they don’t have to pay for those costs. They may not make much of a profit, and at least it won’t cost them. It is a perfect time to negotiate a low rental rate and lock in for a few years so that you don’t feel the increase in price when the market shifts to an equilibrium at a higher market rental rate.
Rent is one of your largest business expenses. If you’re looking to cut costs, now is the time to act. If your lease is expiring within a year, you can opt to relocate to a new office or renegotiate your current lease to lock in on the current low rental rates. If you are looking to open an office, the possibilities for a perfect location at a perfect price are endless at this time!
Need help with your office search? Consider being represented by an agent. It’s in your favor because it saves you the time and hassle of searching on your own and it’s free to you! A tenant/buyer representative researches the market for you, produces all availabilities within your needs, arranges tours, helps you build tremendous leverage and negotiates a lease/sales contract on your behalf. For more information, call or email Olivia Czyzynski at 847.397.8900 ext 226 or olivia@dkrealty.com. She is a Commercial Leasing and Investment Specialist in the Chicagoland area and will help answer all your questions.
Filed under: Leasing, Tenant Representation Tagged: | base rent, commercial real estate, common area expenses, costs, economy, rental rates, taxes
Very true! If you are a business owner you need all the extra savings you can during these times. Another good thing to look for would be office space that is already furnished so you don’t have the extra costs of buying your own equipment.