Stefan Rogers is a senior associate at Voit Real Estate Services and runs the company’s commercial tenant solutions team that assists clients in Southern California and across the United States. Rogers has more than 12 years of experience in commercial real estate in the United States and the United Kingdom and has handled major international accounts.
Q. How can a business save money on real estate?
Almost any tenant with a lease expiring within two years has a good chance of negotiating early and renegotiating a significant reduction in rent and operating expenses in return for signing a longer lease. Alternatively, if a tenant has a space surplus they could attempt to sublease the space to reduce overhead.
Q. Is now a better time to buy or lease office space?
It is a better time to lease. Average commercial office lease rates have fallen more than 30 percent in the past 18 months in Orange County and are likely to decline slightly and remain flat for most of 2010. Average office vacancy rates are approximately 17 percent in Orange County, so there are plenty of options for tenants. Sale prices have fallen dramatically, however, options are limited due to the lack of inventory. If you are starting to gain confidence in your business prospects and can commit to signing a long-term lease, there has never been a better time to lease and lock in low occupancy costs for the long term.
Q. How can a business use leverage with a current landlord to get a better deal?
Hire a tenant representation broker to uncover competitive alternatives and create leverage to achieve the most concessions. This can be done in a professional manner that won’t damage your relationship with the landlord and will ultimately result in a win-win situation. Renewal terms offered to existing tenants are rarely as attractive as terms offered to new tenants. Landlords know that a tenant without representation to advise them is more likely to accept the landlord’s terms and less likely to take advantage of more beneficial lease opportunities elsewhere.