Chip Wiser has more than 25 years of commercial real estate experience, mainly dealing with small leases, acquisitions and dispositions in the San Francisco area and western U.S. Prior to his current role as senior vice president at Cornish & Carey Commercial, Wiser co-founded CM Realty Inc. in 1999.
Q. How long do you foresee real estate prices decreasing?
We think it’s at least another year away before you see the bottom in the commercial side. It really depends on what market you’re in, but in general, rents are continuing to decline more and more [and] buildings are going back to lenders. There still is a slowdown on the demand size; tenants are either shrinking down or just not doing anything.
Q. How can a business save on real estate costs?
There’s a number of ways. If it’s a new lease that you’re looking at, obviously, the rent markets, the concessions that are going on right now, the cost of space is very, very low. But there’s also other ways through negotiating favorable operating expense provisions in the lease, which it really is a very sophisticated way to save money on your real estate costs.
Q. How can you renegotiate your lease before it is up?
In order to approach your existing landlord to see if you can renegotiate prior to the end of your term, you can’t just go to them and say, ‘Hey, lower my rent because the market is down,’ you have to have a reason to be able to open up negotiations. That reason may be, if you continue on in the manner that you’re doing, you run the financial risk of having to shut your business down; it may be that you don’t need the space anymore and that you would sign a longer-term lease if you could reduce some of your space. There’s just a myriad of ways to do it, and at some point, you may just have to wait until that 15 to 18 months beforehand to then start going through the motions of going out into the market.