Orange County CA: &lt;5,000 sqft industrial unit lease renewal rent increase 8%
Landlord wants to increase rent by 8% next year and 6% the following year. Are these reasonable increases in this area? Also are these raises negotiable?
[{"id": "hmxuz2u", "text": "Hello, you can try but oc is really tight, if you don\u2019t renew he will have someone in there by the end of the day willing to pay. \n\nPm me and I can send you a survey so you can see how tight it is.", "replies": [], "depth": 1}, {"id": "hmxv4cp", "text": "I am an Orange County California based commercial real estate broker. On one of the many projects we do exclusive leasing for, the landlord has asked us to raise asking rents three times this year. The first time was about an 8% increase, the second time was a 16% increase, and the third time brings us to a 25% increase based on the rates we started the year with. The problem is I\u2019m able to lease them up regardless. \n\nSo yes if you are an existing tenant, who doesn\u2019t have any more term left on their lease, without options, and might be up for renewal, landlords may look at this as an opportunity to bring you to market rent, and if you don\u2019t like it, then they feel pretty confident that they can find a tenant that will. I\u2019m not saying I like it. But it is the sad reality of a supply and demand open market. \n\nI always negotiate options and do my best when I\u2019m representing and negotiating for the Tenant side. Sadly I\u2019ve seen way too many companies literally go out of business over the years because the broker they previously working with didn\u2019t negotiate lease options in place and the tenant didn\u2019t keep track of when their lease was up for renewal and negotiate it well in advance, or make the move from leasing to owning, which is always something I work with my clients on, usually with SBA funding.", "replies": [{"id": "hmxwcye", "text": "Very insightful. It makes sense that they\u2019re trying to boring our lease to market rate as I see smaller units within the complex rent at a higher sqf $ rate. \n\nWe will most likely take what\u2019s given to us to buy another 2 years. We briefly looked into purchasing using SBA 504 program, but using LoopNet there wasn\u2019t much inventory at the time. (Even looked into Ontario/Chino/Riverside as an option. Cheaper sqft vs OC)   Is there an alternative search engine for commercial real estate aside from LoopNet?", "replies": [{"id": "hmy11sw", "text": "Contact a local industrial broker.", "replies": [], "depth": 3}, {"id": "hmyz8dv", "text": "Definitely contact a broker.  The industrial market is around 1% vacancy.  The new listings get multiple offers immediately.  You need a professional to put your best foot forward on the negotiation.  Most brokerage offices share listings with their fellow agents prior to bringing it to the market.  So you would be in the front of the line if you had representation.", "replies": [{"id": "hmyzh8m", "text": "Stupid question. But where do I look up local brokers  in OC?", "replies": [{"id": "hmz5do7", "text": "google, ask your lawyer, CPA", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hmyq4z0", "text": "Under 10,000 sq feet is some of the easiest stuff to rent. \n\n&amp;#x200B;\n\nIf your willing to sign a longer term lease, you might get them to spread it out a bit.", "replies": [], "depth": 1}, {"id": "hmzec2r", "text": "Forgot to answer your question directly. Reasonable is a relative term. In line with market conditions, unfortunately yes.\n\nAre they negotiable. Everything is negotiable. Do you have a tenant rep broker representing your side?", "replies": [], "depth": 1}, {"id": "hn0ba74", "text": "Annual increases are par for the course.  Orange county should be seeing some fairly healthy demand for smaller space such as yours.  Depending on when you leased and what your rate is today, it could be very reasonable and...the fact that he's giving you a heads up AND a fixed % for 2023....is pretty amazing and indicative of a reasonable landlord.\n\nIf you like the space and want to stay, I'd encourage you to sign the docs and after...send him a nice gift basket.", "replies": [], "depth": 1}, {"id": "hn1zlmt", "text": "I\u2019m sure a few on here know that market. What is the LL asking for a term, rent and escalation? I\u2019d love to own a 5k industrial condo in OC right now.", "replies": [], "depth": 1}]