09 Sep Now is the Time to Get a Sweet Deal on Office Space
In the midst of the COVID-19 shutdown, and the simultaneous rise of WFH or work-from-home dynamic, commercial real estate is steadily on the decline. With many businesses closing and others surviving on minimal staff, office space, retail locations, and other commercial real estate is and will continue to experience a huge vacancy rate. While that’s not good news for them, for savvy business owners, it presents a prime opportunity. Meaning, it’s very possible to lease (or buy) commercial property for a really good deal.
The Buy Low, Sell High Strategy
Everyone’s heard of the old “buy low, sell high” investment strategy. But, only those who actually act on it are the ones who benefit. When the market is down, investment advisors often tell their clients to buy why everything is on sale. However, too many people are just too risk-averse and don’t follow the advice.
Asking rent prices have yet to fall, which is typical in a down cycle as landlords try to hold out as long as possible, says CBRE chief economist Richard Barkham. At the same time, Barkham says, landlords are eager to fill space, so they’re willing to offer a bevy of concessions to the right tenants, including rent-free periods, build-out expenses, and flexible lease terms. —Inc.com
In fact, more people tend to cash-out when the market goes through a downturn. They “realize” an otherwise “paper loss.” The point obviously being that the adage of “buy low, sell high” really works. And, it works so well, it’s repeated over and over. The real trick is to just do it.
How to Negotiate the Best Office Space Deal
With all that said, now is the time to take advantage of the circumstances and land a sweet deal on commercial space. Here are some helpful tips for how to lease commercial space at a substantial discount:
- How long has the space been vacant? Learn how long the space has been vacant because it will give you a sense of how eager the landlord or owner is to fill it. Of course, the longer it’s been empty, the more motivated the landlord will be to sign a new lease.
- Are there other interested parties? If there aren’t any other companies interested in the space, that will definitely work in your favor. Simply put, the less interest, the better for you. After all, that means there’s no competition.
- Does the property have other vacancies? A property landlord or owner with multiple vacancies will be far more willing to negotiate in order to fill as much space as possible.
- Learn about subletting policies. If it’s allowable, subletting can help to offset the cost of leasing commercial space and make it even more affordable.
- Do your homework on similar properties. Another thing you can do is learn about similar spaces. Use this knowledge to negotiate a better deal. For instance, if another landlord/owner offers a better lease rate, you can use that as leverage to bargain on a property for less.
What other suggestions do you have? Please share your thoughts and experiences by commenting and giving others some valuable advice!
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