The terrible state of the housing market, the recent Wall Street meltdowns and the current state of the U.S. economy are all factors leading to the soft commercial real estate market in New York City.
Any way you look at it, we New Yorkers are a tough lot and we're used to dealing with all sorts of crises. As with any crisis, there is always opportunity for those business owners who think creatively. The five trends below are some of the flexible solutions landlords have been offering to commercial lease tenants.
1. Bundling services: A key component to striking any deal as a real estate agent in this current economy is to offer potential tenants "bundled services" (including heat, maintenance, etc) to make it easier to close on a property quickly and efficiently.
2. Chopping office spaces into smaller pre-built units: If a landlord is sitting on a 6000 sq ft office space that isn’t moving, they can chop it up into four 1500 sq ft. office spaces to attract smaller businesses.
3. Giving tenants more concessions and build-outs: These concessions take the form of free paint jobs, carpeting, flooring, lighting, air conditioning, building dividing walls for micro-offices, wiring or whatever a landlord can throw in to accommodate the needs of potential tenants.
4. Negotiating on price More and more landlords are now willing to offer a potential long-term tenant “free rent”: On a five year lease, some landlords are offering three months of free rent and as much as five months of free rent on a ten year lease.
5. Accepting bids from tenants that are well below the landlord’s asking lease price: A landlord would rather accept a bid at a lower rate and bring in some form of income than hold a space vacant for an extended period of time.
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