Saving money on office space rent!

Today more than ever before tenants have the opportunity to save money on there office space rent.

For almost 25 years our firm has studied the office market nationally and we have the highest vacancies and most subleases in this time period.

What does this mean to a tenant? If you have two years or under remaining on your lease now is the time to review it and see what your paying compared to the market.

We have saved our clients from 10-20% in the last eighteen months.

The first ones in get the best terms and conditions, not just on rent but also on containing operating expenses, getting higher build out allowances and other incentives such as moving allowances, IT allowances, etc.

Most firms unfortunately don’t keep track of the deadlines in there lease and come to us after they are on a month to month or holdover provision.

Proper planning saves time , money and will improve your bottom line!

Don’t delay look at your lease today.

We will do a no cost review of your lease and let you know in 48 hours if savings can be met!

Getting Green

One of the most respected contractors in our area is helping companies reduce their carbon footprint and reduce cost at the same time.
I thought you'd like to read how they are helping companies save in this area!

Most of us are aware that buildings and development provide many benefits to society, but they also have significant environmental impact.

According to the latest information from the EPA:

• Buildings account for 38.9% of our total energy consumption
• Buildings account for 72% of electric consumption
• Buildings contribute 38.9% of our total carbon dioxide emissions
• Building occupants use 13% of the total water consumed in the U.S.

Just think, if we compared our buildings to the automotive industry; what is the “miles per gallon” of your building?

The latest trend in our industry is “sustainability.” The current accepted definition is “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

Those of us in the building industry are increasingly exposed and requested to design and build buildings that meet this requirement. Rising energy costs, social activism and yes, government regulation have coalesced to create opportunities for almost all of us to recognize and to act progressively to embrace this concept. Further, an increase in corporate responsibilities has led some companies to become leaders in the “Green Movement” and they advertise accordingly.

The challenge is how do we incorporate and create structures and use processes that are environmentally responsible and resource-efficient throughout the life-cycle of the building and do so cost effectively. As prudent business people we are always reminded of “Return on Investment.”

A great and simple way to create alternative energy source, whether for new buildings or existing buildings is simply energy conservation. It is the lowest cost of energy we have at hand. Since 1973 alone, improvements in energy efficiency have resulted in a 50% reduction in our daily energy use, which is the same as discovering an extra 25 million barrels of oil every single day. Clearly saving energy is like finding it.

Renier recently recommended and completed the installation of an energy efficient lighting system for Atrium’s 265,000 square foot office/warehouse facility. Co-founder David Hirsch was excited to learn that his company will save 30% on electric costs.

If you would like to speak to the good people at Renier, contact Mike Vasbinder at

mvasbinder@renier.com
Enjoy your summer!

The Silver Lining in Commercial

With everyone complaining about how bad business is, activity being down and companies procrastinating the one silver lining is the great opportunities for companies to improve their type of space in today's market.
Whether that is a start up going into a sublease space for thirty cents on the dollar, a tenant in a Class B office building moving into a Class A building for the same price with all the concessions being offered and negotiated NOW is the time to look at your current lease and those of your clients and see how they can improve their bottom line not only for 2010 but for years to come!
Chances like this don't come around very often I can say after almost 25 years in the business so take advantage of them NOW!

Residential to Commercial

Many Residential Agents are trying to figure out whether to refer commercial prospects or work the assignment themselves.
We teach a class on "Residential To Commercial" and think the best course of action is to work with a commercial agent together if you want to learn the business or refer the assignment out and let the experienced commercial agent do the job correctly.
No one can afford a poor reputation, not the agent, firm or our industry
so think before you think you can tackle an assignment outside of your experitise
or take the time to learn how to complement your residential business with commercial business.
See Schenkseminars.com for more on this

Mid Year Commercial Real Estate Activity

I just read with interest the first half NAR report showing commercial activity . Here are some of the highlights I thought you would be interested in reviewing:

• Sales Volume Compared with Previous Quarter - Down 3%
• Sales Volume Compared with Previous Year - Down 6%
• Sales Prices Compared with Previous Quarter - Down 9%
• Sales Prices Compared with Previous Year - Down 16%
• Expected Availability for the Next 12 Months - Up 12%
• Expected Cap Rate Movement for the Next 12 Months - Up 9 bps
• Rental Volume Compared with Previous Quarter - Up 3%
• Rental Rates Compared with Previous Quarter - Down 10%
• Level of Rent Concessions Compared with Previous Quarter - Up 9%
• Direction of Business Opportunities Compared with Previous Quarter - Down 1%
• Volume of New Construction Compared with Previous Quarter - Down 16%

What does this mean to you and anyone connected in commercial real estate?

You need to plan more than ever. Having a specific strategic plan and team of experts to help you formulate and implement that plan is now more important than ever.

Don't think you can do it by yourself. Surround yourselves with people experienced in the areas you are considering exploring. Take your time to do this right and you can prosper even in this market. We can show you the way!

Learning the Commercial Real Estate Business

I just returned from speaking to Coldwell Banker Commercials National Convention as as well as teaching a class for the California Association of Realtors.

Both had one thing in common agents that wanted to improve their bottom line and professionalism. Most agents are generalist and dont have a competitive advantage over other agents. Today to stand out you need two things:

• Be a Master of your market--to know it like no other
• Be a Master of the process--help the client get what THEY want!

If you can do this you can stand out and make your dreams come true! Specialize in an area of commercial real estate that excites you! You can't know everything about everything!

Protect from Undue Rent Escalations in the Term of the Lease

This can happen in any type of lease from retail to office or industrial.

Many times there are different rent escalations and to protect your client from it by knowing the market and what is typical in your market per product type.

Don’t let an aggressive landlord or developer get huge escalations that can ruin your client’s profit margin. What is fair? That will depend on how much money the rent is; the improvements are costing the landlord and how long the lease is and the credit of the tenant. If it’s a large tenant with good credit many of these you can reduced or eliminated. If it’s a small tenant and they want a deposit have this be able to be reimbursed or put towards rent after a time of showing good payment history.

Escalations that come because of large improvement outlays from the landlord should then be taken off once that extra amortization is completed in that term of the lease. Be careful not to let a high rental rate continue if the escalation was caused from these extra improvement costs!

Doing rent surveys and tracking the market can help you greatly in this area.
If you don’t know the market learn it, and get with other professionals and organizations that sell this information to make sure you are on top of what is market at the time of your assignment.