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Commercial Real Estate Update October-November, 2010 Companies Create Value By Relocating Company relocations are becoming rare events as landlords attempt to retain existing tenants. The commercial real estate market in Colorado is continuing to be negatively impacted by the Great Recession resulting in opportunity for companies/ tenants. Landlords are approaching tenants well in advance of their lease expiration in an attempt to offer renewal terms and capture the lease renewal prior to the tenant going to the open
market. This is an excellent strategy for a landlord but tenants may not be getting the most aggressive lease terms. If tenants want to guarantee the most favorable terms and conditions for their commercial lease, they must conduct a full market study and review all relocation possibilities. Then and only then can the landlord’s renewal offer be compared to the true market conditions.
The market is defined by the competitive nature of the deal negotiation and completed deals. A company should conduct their own due diligence prior to making a costly decision. Companies
concentrating on their core business may not want to spend the time or delegate the responsibility to an employee that could be lacking the skillset or market knowledge of the local commercial market. An alternative to attempting an in-house process is to contract with a commercial broker who works as your advocate and can perform all of the required duties at little-to-no cost to your company. Working with a broker also allows for an arms-length verification of market conditions and creates a competitive environment for your current landlord. Chris Jensen
Lease and Market Review Tenant Representation Consulting
Vista Commercial Advisors Reduces Companies Overhead "Surround yourself with the best people you can find, delegate authority, and don't interfere." Ronald Reagan
Vista Commercial Advisors can be the commercial real estate division of your company.
Vista Commercial Advisors will provide a complimentary lease review and comparison to current market conditions enabling you to time your lease renegotiation properly. Please mention LRC OFFER.
Integral Consulting relocates within the US-36 Corridor and realizes the gain. Vista Commercial Advisors (VCA) recently completed a lease negotiation on behalf of Integral Consulting for 6,812 sqft located in the Centennial Valley Business Park at US-36 and McCaslin in Louisville, Colorado. Integral Consulting Inc. provides a full range of scientific and engineering consulting for industry, the public sector, ports, nonprofits, and law firms. Integral is currently involved in high-profile environmental investigations across the country.
Integral increased in size to accommodate future growth and maximized the efficiency of their floor plan while lowering the occupancy costs per sqft by 10.64%.
Reduction of Operating Costs
-10.64%
VCA achieved the reduction of overhead costs and the clients other goals by creating a organized competitive process. In addition, the new location at 285 Century is walking distance to daytime amenities that allows the employees to eliminate extra vehicle trips during the work day. Chris Jensen
COVERING THE US-36 CORRIDOR, FOOTHILLS, I-25 CORRIDOR, I-70 CORRIDOR, NORTHERN COLORADO, DENVER METRO, AND YOUR LOCATION.
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Vacancy in Boulder and Broomfield Counties Is it possible that office vacancies have hit bottom and are starting to stabilize somewhat? From late 2005 to present, the lack of new office buildings coming online helped with the absorption of existing second generation office space. Companies looking to expand or relocate
to this submarket signed leases in existing product. From early 2004 to present, the US-36 corridor has rebounded from a dramatic increase in office vacancies resulting from the dot.com bust. This is the primary reason why the US-36 corridor has remained somewhat healthy in regards to its vacancy rates and other submarkets. Chip McReynolds
Office Vacancy-Boulder & Broomfield
30.0%
Office Vacancy
22.5% 15.0% 7.5% 0%
Data Obtained from Xceligent
2004
2005
2006
2007
Landlord Concessions Rental abatement for the most part have become the norm with most landlords in the market place. Landlords are finding that they must get creative in order to secure their existing tenants and/or land their next. Effective lease rates are diminishing faster than face rates due to landlord concessions. A good
landlord will do their best to keep their existing tenants happy while providing lucrative incentives to prospective tenants. A good rule of thumb (at least for right now) is for every year of term negotiated there is one month free rent; for a five year lease there could be five months free rent. Be sure to have your broker advise you property on the current market conditions prior to accepting an offer from a landlord. Chip McReynolds
2008
2009
2010
Vista Commercial Advisors provides brokerage services for companies wanting to reduce their overhead through a renegotiation of their commercial real estate leases and/or relocation.
Please visit us on the web at : www.vistacommercial.com