How Realtors Can Help!
Filed Under Ask The Expert, Business and Life, Market Info · Tagged: commercial real estate, How Realtors Can Help!, LinkedIn, office leasing
Great article on why you should hire a commercial real estate agent.
http://howcommercialrealtorshelp.ca
In a 2007 national survey of business professionals involved in real estate, 92 per cent of all respondents said they would describe the services of a commercial REALTOR® for a transaction as highly useful, or useful.
* 80% of all respondents said using the services of a commercial REALTOR® would save them time;
* 80% of respondents said using a commercial REALTOR® would help avoid hassles and complications;
* 86% of all respondents said using a commercial REALTOR® means market knowledge
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Shared Offices
Specialization in Real Estate
Filed Under Ask The Expert, Business and Life, Marketing Tools · Tagged: Add new tag, available office, commercial real estate, exceptional service, focus time, jack of all trades, market knowledge, office leasing, Real estate advice, Specialization in Real Estate
I disagree with agents that think they can be the jack of all trades. They are jack of “something” all right. Yes, you lose out on some commissions by turning away or referring opportunities but if I were a tenant looking for commercial real estate advice I would want the best agent working on my behalf. As a tenant or landlord, do some due diligence and hire the agent that actively works your market and not a friend of a friend.
To be a specialist and provide exceptional service you need to focus on a specific type of transaction (office leasing in my case) and engross yourself in that market. It’s even better if the agent specializes in working with tenants in your business vertical. I specifically track “shadow” options and shared space that haven’t come to market yet. I am consistently updating my database, speaking with tenants and doing research so I have the leg up on my competition. Unless your market is very small you need a lot of focus time. By referring requirements outside of my specialty I generate the time I need to better my market knowledge and use it to service my clients.
I recommend you interview a few agents and work with the one you feel will best service your needs!
Give me a shot – Chris Fyvie – 416-992-9869 or E-mail Me!
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How do I hire an office broker?
Filed Under Market Info · Tagged: advice on finding office space, choosing commercial real estate representation, hiring a broker, How to I hire an office broker?, office leasing
Awesome post from my friends at the ROFO Blog. Check them out here!
1. How active is the broker in the marketplace?
If the commercial real estate broker is active in Carlsbad, but has never worked in San Diego, where you’re looking for office space, it could be a mistake to hire him/her. If they can prove to you that they have the ability to find the tough to find spaces and get information on the most recent transactions. If they can pass both of these hurdles and seem qualified, an out-of-town broker can provide the right level of service. If not, ask them for a referral to a local broker.
2. How long has your broker been in the biz?
Less experienced brokers may work hard but may expose you to common mistakes. Industry veterans can quickly make you aware of the pitfalls and help you avoid them. After about three years in the business, a broker is usually seasoned enough to have learned the tricks of the trade.
3. Check out references
Ask to speak to recent clients who can vouch for their diligence and honesty throughout the process. Ask about their negotiating skills and time spent on the process.
4. Are you looking for a Specialist?
Many brokers specialize in types of firms or industries. If you can find the broker who specializes in your industry (biotech space, retail, restaurants, etc), you may get a leg up in the negotiation.
5. Conflicts of interest
Some brokers might work for many landlords throughout the city. If they do, at times their fiduciary duty is challenged when they represent both parties. Most brokers are ethical and this would not create a bad situation, but exceptions do exist.
For short term or small office space less than 600 sf click here!
What are you getting out of your social media?
Filed Under Business and Life, Market Info · Tagged: Commercial Real Estate and Social Media, commercial real estate marketing, facebook, LinkedIn, marketing real estate, office leasing, social media, social media marketing, top toronto real estate agent, twitter
Commercial Real Estate and Social Media
I have been hearing this question a lot lately – “As a realtor, what are you getting out of your social media efforts?”. The answer if you qualify it monetarily to date, is very little, however, from a prospecting and networking perspective it has been unbelievable!
When I only had a website to rely on 2 years ago I generated approximately 1 or 2 leads a week. I then moved to my blog which started generating 3 to 4 leads per week. I am now meeting with as many as 8 to 10 potential new clients a week through Twitter, LinkedIn, Facebook and my blog. Out of a total of 10 leads I will refer about half to business centers around the Toronto area, 3 or 4 leads will require approximately 1000 sf (give or take) and are usually tire kickers with unrealistic expectations and the other 1 or 2 leads will come together as long term lease opportunities with requirements of between 1,000 and 5,000 square feet.
So why do I bust my butt for 1,000 to 5,000 sf leads? Two reasons.
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I believe commercial real estate is a relationship industry. I will do a deal of any size as long as I believe in the company and the people running it. I provide the same level of service for a 1,000 square foot mobile application developer as I do a 10,000 square foot advertising agency. It’s all about good service and developing the relationship.
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Social media will become one of the most trusted and popular ways to exchange referrals and one of the easiest ways to identify an expert in a particular field. If you are not using social media effectively now you will not find yourself at the top of your field when it does go mainstream. I justify my efforts now by understanding that I am focusing on my future and believing that when the dinosaurs of the real estate industry do start to figure it all out I will be ahead of the game and can focus my attention on my clients; after all, that’s what matters!
For all those commercial realtor’s using social media today (particularly in Toronto) – let’s network and see how we can help each other out. Lets have some fun watching the rest of them play catch-up!
Have a comment? Post below as I’d love to get some dialog going!
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Important Issues to Consider When Leasing
Filed Under Business and Life, Market Info · Tagged: Important Issues to Consider When Leasing, improvement costs, landlord, lease negotiations, lease rate, leases, legal help, market interest rate, office leasing, space requirements, square foot, tenant improvement, tenant requirements, typical office
Office Leasing Toronto
All tenant requirements are not the same, but their needs can generally be prioritized in this way.
1. Budget (lease rate)
2. Location
3. Space requirements, including but not limited to:
* Parking
* Build-out
* Loading capability
* Accessibility
* Presence
4. Employment Base
5. Lifestyle
Before You Start
* When starting the search for new space, enlist the services of a licensed professional to assist you in navigating through the search process and lease negotiations.
* Take the time to read your current lease and provide a copy to your representative for review. There may be clauses or specifics that impact your relocation.
* Take the time to identify requirements, including square feet, power, geographic area, affordability (monthly lease commitment), and how the move affects both employees and customers.
* Your interests are best served by interviewing more than one real estate professional to choose someone who can assist help you accomplish your goals. At the end of the day, the lease you sign will be your home for the next three to five years.
What Tenants Need to Know
Plan to spend real money to get space built-out the way you want it. Tenant improvement costs have doubled since the last time most tenants negotiated their leases. A tenant locating to a new space that requires improvements can expect to spend between $10 and $30 per square foot of their own money, in addition to the landlord’s standard $25 to $30 per square foot allowance, to finish the space to typical office building standards. Some landlords, however, are willing to amortize these costs over the term of the lease at a market interest rate.
Leases are becoming more complex. It is not uncommon to see a 40 to 50-page lease that is more intricate, with clauses that require close examination. Unfortunately, legal help is compulsory for the typical tenant.
The best way to get the space you want is to find a qualified real estate professional who is experienced in the type space you need and who knows your desired area. Not only does this provide you with sound advice and a leg up in negotiating, but will also lend credibility to your requirements. Sophisticated landlords view prospective tenants who have representation as being more credible and better to do business with.
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More Short-term Pain for the Office Market but Signs of Recovery by Year-end
Filed Under Market Info · Tagged: baseline scenario, contraction, economic assumptions, economic s, financial stresses, great depression, leasing market, negative absorption, negative news, office leasing, onslaught, peak of the market, recent history, recession, relative basis, s, stimulus package, trough, wall street journal, worst case scenario
Economic Assumptions
While the recently announced stimulus package will make a difference at the margin, the economy will shrink in both the first and second quarters and quite possibly the third, making this recession the longest since the Great Depression. Based on the most recent Wall Street Journal consensus forecast the US economy is likely to contract by 3.0% from peak to trough – making it one of the most severe recessions in recent history. By comparison the 1974/75 and 1980/82 recessions saw peak to trough contractions of 3.1% and 2.2% respectively. An alternative, and worst case scenario, would be a 4.5% contraction as indicated by a recently published study by the IMF showing economic recessions preceded by “financial stresses” are more severe than those not impacted by turmoil in the financial system. Our baseline scenario sees job losses continuing through 2009 with only modest gains in 2010. On a relative basis, job losses will exceed both the 1974/75 and 1980 recessions.
The Office Leasing Market
With the above backdrop we expect the US office market to contract by 3.0%. This equates to 125 million square feet (MSF). From the peak of the market, occupied space has already contracted by 15 MSF, leaving a further 110 MSF. Most of this negative absorption will be experienced in 2009 with approximately 25 MSF per quarter with the balance in early 2010. The worst case scenario would see occupied space contract by 187 MSF. To put these numbers in context, the office market downturn during the 2001-2003 period contracted by 120 MSF. For local markets, most can expect occupied space to also contract by 3.0%. However, markets highly skewed towards financial services such as Manhattan and San Francisco will mostly likely contract by 6.0% and in a worst case scenario 9.0%. At 9.0%, Manhattan negative absorption would total 34.0 MSF and San Francisco 6.6 MSF.
Financial Services Employment (Percent of total employment)
Select Major Markets
Atlanta 6.2%
Boston 7.6%
Chicago 7.7%
Dallas/Ft. Worth 8.0%
Denver 7.4%
Houston 5.6%
Los Angeles 5.2%
Manhattan 10.7%
Philadelphia 7.6%
San Francisco 9.5%
Seattle 6.4%
Washington 4.9%
US Average 5.9%
Source: BLS
Office Rents
Despite modest new construction in the next year, office vacancies are expected to rise by six percentage points to 20% by the end of 2009 which will put significant downward pressure on office rents. Downtown office rents are expected to fall by 25% (peak to trough) while suburban rents will fall a more modest 15%. These declines are similar to those experienced earlier this decade, although the national vacancy rate topped out at 16.5% and not 20% as indicated above. Local markets are expected to register declines above and below the national averages depending on construction, exposure to the financial services sector and the level of sublease space. Markets with heightened levels of any of these characteristics can expect rents to fall an additional 5%.
Source: Colliers Research
There is no disputing the outlook for office building owners is grim. Even the base scenario has building occupancy rates falling below 80%. This recession will be without doubt the longest since the Second World War and quite possibly the deepest. There will be markets that perform better (and worse) than the national average but with all parts of the country, and indeed the globe, reporting sluggish economic conditions none will escape the current downturn. The good news is that the economy will be on the mend later this year but not until after suffering a very large setback and in particular a job market that will not show any signs of robust growth in 2009 even with the benefits of the just announced stimulus package. Landlords will be faced with a very challenging leasing environment while tenants that have leases expiring will reap the benefits of 2002/06 era rents. Timing the bottom will be difficult but all indications are rents will decline most of 2009 and possibly into 2010.
Ross Moore
Executive Vice President, Research
Colliers International USA
Top 10 Tips for Office Leasing
Filed Under Marketing Tools · Tagged: commercial real estate, leasing tips, office leasing, Top 10 Tips for Office Leasing, vacancy rates
Top 10 Office Leasing Tips
Here’s a list of commercial real estate tips I have used in the past with clients… FYI – number 10 is outdated as vacancy rates are currently very LOW!
1. Commencing the process too late
By failing to plan well in advance, you can find yourself in a poor negotiating position – the shorter the lead time, the fewer the options with which to leverage negotiations. Ideally, you should aim to have three to four suitable options on your shortlist, well ahead of your lease expiry.
2. Not having a clear real estate brief
It is imperative that you understand your company’s real estate needs, not just today but for the next few years. No doubt, you expect your business to evolve over this period. Ensure that your long term needs are being considered at the same time as your immediate requirements.
3. Focusing entirely on financial costs
Too often, business accommodation decisions are made based on bottom line costs. Consider the costs associated with attracting and retaining good staff as property costs are typically a distant number two to HR costs. If you lost 10% of your staff in a move, how much would it cost your business? Does your property profile send the right message to clients?
4. Failing to appoint a project leader
A single point of contact will ensure the right message gets out to the market and save time for all involved. Input from your Finance, HR and IT departments, plus the advice of lawyers, architects and project managers is required. Appoint someone in your organization to take control of this process. Ideally, this individual is not only well organized and a good communicator but has authority to sign off on major project stages.
5. Incorrectly estimating the space required
Workplace trends are revolutionizing the way people work and the space required to set up an office. Only begin to inspect premises once you have assessed your space requirements with the assistance of a workspace strategist/designer. This will ensure that you’re looking for the right amount of space and will allow you to drive cultural change via new ideas and advancements.
6. Not allowing time to make-good
Should you decide to move, you will probably be required to “make-good” on your current premises. This simply means returning your premises to its original condition. This can take considerable time and is a commitment often underestimated or overlooked by tenants. You don’t want to be paying a premium post-expiry rent while builders complete your make-good obligations.
7. Acting too slowly to secure the preferred option
Tenants often invest a considerable amount of time and effort going through the process of selecting a suitable accommodation option. Once your decision is made however, it is imperative to “lock it away” quickly. Landlords will continue to seek tenants for the space until a lease is signed and a bank guarantee secured.
8. Not conducting a test-fit
No two office buildings are the same. It is not possible to know how a particular option will accommodate your business until a “testfit” is conducted. If one premises can accommodate more staff than another in an equivalent amount of space, then your total rental cost is lowered. You won’t know how the options compare until you get a professional space planning perspective for both premises.
9. Failing to allow for growth space
You’re not in business to shrink. Most tenants expect their business to grow over the next five to seven years (equating to the approximate length of your lease). Flexible lease terms and a realistic space budget will give you the latitude you need to expand.
10. Not appreciating that the best opportunities are not always currently available
Though there are currently high vacancy rates in most major centres, there are sectors of every market that are very tight. If you require something very particular, you’ll have to allow plenty of time and be prepared to be very flexible in how the deal is put together. In some cases, you may have to be prepared to take on the risk of subleasing your own space or extend your current location to wait for a tenant to vacate that perfect location. A good property consultant will know what is becoming available and when – well before it is.
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