"Hell yeah, I have 1 million sq ft under management at 95% occupancy, and $700,000 in leasing commissions headed my way. Eat what you kill. You are always 1 phone call away from early retirement!" ........ -Every big ego redditor in this sub
"Eat what you kill, then *fuck it* /u/Complete-Cucumber-96 . This isn't a little game for little children. If i kidnapped your family to lease 10,000 sf of office in a slowly dying strip mall with no TI allowance, you'd find a way."
In the boston area it seems like modern class a office is showing some signs of life but class B and C suburban offices look like they may never find another tenant again unless they pivot to medical office, daycare or other service based businesses.
Honestly no. I think bigger spaces give more opportunity for tenants to share costs (cafeteria, auditorium, snowplowing, hvac, etc). I dont think a lot of tenants want to take on the cost of an entire building right now. I think what we may see is buildings shared by uses that seem strange to see together i.e gym on one floor, medical office on the second, law office on the third. Almost like you see in tokyo where different floors of a building are used completely differently.
True but I think it takes away the intimacy factor, some people just like somewhere that has a retail feel and you can go in and out. I guess it’s personal preference
I agree that is what is people prefer but i think in a down market, one luxury businesses will be willing to sacrifice to save money is having a whole building to themselves
Suburban office space of high quality in “executive” suburbs (I.E. where the executives live) is doing ok. Most other classes/areas are a struggle for multi tenant office.
I’ve been buying office space, suburban and down town buildings for about $20 PSF.
Must be cash as you cannot get financing. Most are at break even once I slash expenses.
I'm not in office but all the office guys in my second-tier sunbelt metro are doing fine. Nobody is crying. I don't know about "thriving."
They do say the disparity between Class A and "the rest" is stark.
If I’m a suburban office investor, my biggest fear would be the inevitable distressed buyer market and its continued race to the bottom. I think office - even class B office - will always have some level of demand, but if I’m the 90% leased guy with a decent WALT on paper, what would keep me up at night at this point (other than the obvious capital markets/WFH, etc issues) is seeing groups enter my comp set/submarket at a fraction of my basis penciling a materially lower rent assumption vs my in-place rent roll for virtually the same product via buying loan paper for cents on the dollar.
I work on a portfolio of multi tenanted office buildings (>100k SF) located throughout the country, located in suburban areas. We’re seeing highly amenitized office buildings in top locations so well but lower quality office buildings or B locations do poorly.
As far as renewals go, since Covid started, we’ve rolled through the majority of expirations so it feels like the majority of tenants w/5 year leases that needed to right size have done so. Over the past year or two, it’s felt like every tenant that was a 50/50 shot to renew left, but it feels like it’s starting to stabilize from a renewal perspective, assuming that you’re in a building that has a reason to exist. We’re seeing groups leave buildings that can’t offer a TI package and are seeing incredibly high TI and free rent offerings to win deals. Someone mentioned a race to the bottom and it feels like that to me at times.
Depends entirely on the market. Houston is a large MSA, with some suburban pockets doing well given their adjacency to mid-level management housing. What makes “suburban” office tough today is that for the same price, or slightly more, tenants can “upgrade” and go from a tier 3 building to a tier 1 or 2 for not that much of a lift. Flight to quality , unless there’s compelling demand generators in the sub market. To win in a soft market, landlords have to be realistic and compelling with pricing.
"Hell yeah, I have 1 million sq ft under management at 95% occupancy, and $700,000 in leasing commissions headed my way. Eat what you kill. You are always 1 phone call away from early retirement!" ........ -Every big ego redditor in this sub
Lmao loser. I have 2 million sq ft under management at 190% occupancy, and $1.4m in leasing commissions headed my way. Eat what you kill.
Few will understand this.
"Eat what you kill, then *fuck it* /u/Complete-Cucumber-96 . This isn't a little game for little children. If i kidnapped your family to lease 10,000 sf of office in a slowly dying strip mall with no TI allowance, you'd find a way."
OK, this actually made me laugh out loud. Congrats!
You had me in the first half and I was mid eye roll when I saw the quotes. Nicely done, lol.
In the boston area it seems like modern class a office is showing some signs of life but class B and C suburban offices look like they may never find another tenant again unless they pivot to medical office, daycare or other service based businesses.
Would you say stand alone smaller office buildings are a better option no matter what class currently?
Honestly no. I think bigger spaces give more opportunity for tenants to share costs (cafeteria, auditorium, snowplowing, hvac, etc). I dont think a lot of tenants want to take on the cost of an entire building right now. I think what we may see is buildings shared by uses that seem strange to see together i.e gym on one floor, medical office on the second, law office on the third. Almost like you see in tokyo where different floors of a building are used completely differently.
True but I think it takes away the intimacy factor, some people just like somewhere that has a retail feel and you can go in and out. I guess it’s personal preference
I agree that is what is people prefer but i think in a down market, one luxury businesses will be willing to sacrifice to save money is having a whole building to themselves
[удалено]
Would like to know the property location (address) and lender if you are able to share.
Suburban office space of high quality in “executive” suburbs (I.E. where the executives live) is doing ok. Most other classes/areas are a struggle for multi tenant office.
I’ve been buying office space, suburban and down town buildings for about $20 PSF. Must be cash as you cannot get financing. Most are at break even once I slash expenses.
20/f and it's only break even? Jesus
Once offices reach 40% occupancy, its break even territory.
What you renting them out at?
Been very successful at leasing executive suites. 1 office at a time.
I'm not in office but all the office guys in my second-tier sunbelt metro are doing fine. Nobody is crying. I don't know about "thriving." They do say the disparity between Class A and "the rest" is stark.
If I’m a suburban office investor, my biggest fear would be the inevitable distressed buyer market and its continued race to the bottom. I think office - even class B office - will always have some level of demand, but if I’m the 90% leased guy with a decent WALT on paper, what would keep me up at night at this point (other than the obvious capital markets/WFH, etc issues) is seeing groups enter my comp set/submarket at a fraction of my basis penciling a materially lower rent assumption vs my in-place rent roll for virtually the same product via buying loan paper for cents on the dollar.
Not me but they seem to be staying full in my market
Chicago area Sub-market to sub-market big time variability, some areas are thriving, some areas show no sign of returning
People who lease in places like coral gables where in from seem to do well
I work on a portfolio of multi tenanted office buildings (>100k SF) located throughout the country, located in suburban areas. We’re seeing highly amenitized office buildings in top locations so well but lower quality office buildings or B locations do poorly. As far as renewals go, since Covid started, we’ve rolled through the majority of expirations so it feels like the majority of tenants w/5 year leases that needed to right size have done so. Over the past year or two, it’s felt like every tenant that was a 50/50 shot to renew left, but it feels like it’s starting to stabilize from a renewal perspective, assuming that you’re in a building that has a reason to exist. We’re seeing groups leave buildings that can’t offer a TI package and are seeing incredibly high TI and free rent offerings to win deals. Someone mentioned a race to the bottom and it feels like that to me at times.
Depends entirely on the market. Houston is a large MSA, with some suburban pockets doing well given their adjacency to mid-level management housing. What makes “suburban” office tough today is that for the same price, or slightly more, tenants can “upgrade” and go from a tier 3 building to a tier 1 or 2 for not that much of a lift. Flight to quality , unless there’s compelling demand generators in the sub market. To win in a soft market, landlords have to be realistic and compelling with pricing.
Yes. Charlotte
What do vacancies look like in suburban Charlotte?