Lease renewal question 3 year lease renewal - $27 sq ft
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[{"id": "hy9883v", "text": "Need more detail... \n\nLocation \nSize\nUpfits &amp; Amenities \n\nCan you do without the office or with less or less desirable space? Someone out there is vacant if you're willing to make a change.", "replies": [{"id": "hy99jc1", "text": "I\u2019m in an orlando suburb\n\n770 sq ft\n\nClass b I\u2019d guess, it has a gym and a cafe but I don\u2019t think anyone uses the gym. It\u2019s on a golf course. 4 story building.\n\nHas a number of federal agencies in the building.\n\nIt\u2019d be a huge hassle to move tbh, the deal isn\u2019t terrible but I\u2019m not sure if I should consider moving or trying to press for a better rate.", "replies": [{"id": "hy9abbp", "text": "770 sq ft isn't going to be any significant % of the property so you don't really have much leverage. If it's too much of a hassle for you to move for then what are you even asking?", "replies": [{"id": "hy9eu54", "text": "True but broker will want to get renewal done, and LL is probably looking for any good news, so I\u2019d push back", "replies": [], "depth": 4}], "depth": 3}, {"id": "hy9fw7p", "text": "My market is southern CA so while I can't comment specifically on prices in your area, I can say this....there is more demand for smaller space than larger spaces...and small spaces are easier to lease and do lease much faster than larger spaces. \n\nThere is a perception that office rents have gone down because the vacancy has increased because of Covid. While vacancy and sublet space is increasing, rates have stayed pretty consistent. And while parking lots may show less cars because people aren't coming into the office, many businesses are continuing to pay the rent on their spaces....they just don't have as many people physically coming into the office.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hy9akk0", "text": "Depending on where you are, some office has gotten way more competitive. Suburban NJ is on fire with rent in the $50s/ft for downtown office near train stations and lunch spots. Suburban office parks are dirt cheap and 40% vacant just 10 miles away. Really depends.", "replies": [], "depth": 1}, {"id": "hy9auwv", "text": "manage a portfolio of office space nationwide including Orlando. Rents haven't gone down as much as people thought. Instead Landlords offered concessions on 3 years that they wouldn't have done in the past. $27 is on the higher end for Orlando  suburbs market, but typical. If they won't budge on rate, ask for free rent or new finishes.  At 700SF though there isn't a ton of leverage assuming you are in a large office building.", "replies": [], "depth": 1}, {"id": "hy9gr9j", "text": "I bet one month of free rent would be an easy ask. Two months should be good for them if you\u2019re a good tenant. Three months will make them do math and see how much it would cost to replace you.", "replies": [{"id": "hy9i96v", "text": "I agree, also if they paid rent 100% even when out of the office during pandemic some credit is merited.", "replies": [], "depth": 2}], "depth": 1}, {"id": "hy9j7ri", "text": "At least in the DC/Virginia/Maryland area, office property owners have been choosing increased vacancy over lower rates. They want to keep their asking lease rates high so that it looks like the building is more valuable than it actually is. Thus, keeping as much access to credit as possible.", "replies": [], "depth": 1}, {"id": "hy9jqkc", "text": "Small, \"close to home\" office spaces with amenities are at a premium right now.  If I'm your LL I'm not so inclined to negotiate much.  \\*Maybe\\* a month abated or minimal TI for a 3 year deal. Bigger picture, I'm pushing rent in almost every building I represent right now, particularly in multi-tenant, smaller buildings.  It varies by market and is completely intuitive, but the office segment is very strong right now.", "replies": [], "depth": 1}, {"id": "hy9o5sx", "text": "As a counterpoint, office rents are back where they were 10 years ago in my area, down to 18-22/sqft instead of the 32-35/sqft from 2019. Then again, in my area there are a lot of tech workers, and very few of them are returning to the office. We also had a lot of pandemic restrictions that killed a ton of small businesses. So vacancies were huge. \n\nGo on LoopNet and look at other office spaces. That will tell you if your LL is overpriced or not. \n\nYour LL might be willing to offer you a shorter-term lease at a lower rate, but I think many are unwilling to lock in \u201cbelow market\u201d rates for 3-5 years.", "replies": [], "depth": 1}, {"id": "hy9pbqt", "text": "I oversee a commercial portfolio with a mixture of office/retail/warehouse in Florida. I've raised rents across the board in 2021 and we are seeing more increases this year.  My investors are loving the extra revenue and I have been able to keep expenses down in 2021. I think 2022 my investors are just going to have face the reality that we are in a pandemic and no I can't make it cheaper. \ud83d\ude02", "replies": [], "depth": 1}, {"id": "hyaz2we", "text": "Your best bet is to do some research and look into rates at other properties that you would likely move to if you had to leave this location. Take some tours. Consider all your options. You might find some hidden gems or you might not. But knowledge is power here. If you find a cheaper space you can use that as leverage. Otherwise you are flying blind.", "replies": [], "depth": 1}, {"id": "hyezjqs", "text": "So ~$1,800/month in Orlando metro? If so, that\u2019s not bad. You could get two of the cheapest offices at Regus and pay more\u2026", "replies": [], "depth": 1}]