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A Tool That Lets You Evaluate the Cost of Office Space

March 1st, 2012

We encourage you to use a simple yet effective tool on our website to help you determine the cost range of office space. Simply input a square footage number, rental rate and the length of lease (lease term). You should note that there are no barriers to entry with this tool in that you do not have to enter an email address, sign-in, create a password, etc.

The name of the tool is the Office Space Cost Estimator (click on this link to go directly to the tool). To show you how easy it is to use, we’ve included a visual below of the data input section:

Rentable square feet required _______

Estimated market rental rates _______

Estimated range of rental rates _______

Preferred lease term _______

You can quickly change any of the input numbers and instantly get a summary of lease costs. For instance, if you inputted a $25.00 rental rate and a range of 10%, you would see total costs for rents at $22.50, $25.00 and $27.50 per square foot.
Likewise, the chart in the tool gives you total costs for a range of loss factors, so you can understand what the impact a low loss factor would have on your bottom line.

The differences will astonish you; for example, the cost of a 20,000 square-foot, 7 year lease with a rental rate of $35 per square foot can vary by as much as $2 million dollars if you put a 5% range of rental rates. Try it and see for yourself. You can create as many ‘what if’ scenarios as you like.

Lastly, there are many other interactive tools at www.choycepeterson.com

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Posted in Greenwich, Westchester County commercial real estate | No Comments »

 

UPDATE: Office Space Within 1 Mile of the Merritt 7 Complex

February 23rd, 2012

There are a total of 10 Class A & B buildings that offer a 10,000 square foot suite within 1 mile of the Merritt 7 Complex (9 Class A and 1 Class B). The total square footage (sf) of these buildings is 2,398,350sf (Class A 2,162,350sf and Class B 236,000sf).

The results are as follows:

# of buildings # of suites
Class A 9 23
Class B 1 6
Total: 10 29

The Class A Buildings are:
- 20 Glover Avenue
- 166 Glover Avenue
- 383 Main Avenue
- 761 Main Avenue
- 901 Main Avenue
- 101 Merritt 7
- 301 Merritt 7
- 401 Merritt 7
- 501 Merritt 7

The Class B Building is:
- 150 Glover Avenue

The biggest change that stands out is the decrease in Class B buildings that offer a 10,000sf suite. In our previous, April and September 2011 blogs, the same Class B buildings were displayed (129 Glover Avenue, 150 Glover Avenue, and 26 Pearl Street). Now only 150 Glover Avenue stands with a 100% vacancy rate at 236,000sf available.

The same Class A buildings are being displayed, but with a slight increase in suites, 19 to 23, available throughout these buildings. The total available space is 733, 988sf compared to 689,782sf in April 2011 and 692,897sf in September 2011.

It should be noted that many of these buildings offer shuttle service to the train station as well as cafeterias and fitness centers.

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CoStar Article: Renew or Relocate? Incumbent Landlords Willing to Sweeten the Pot

February 16th, 2012

This article as published on CoStar should be read by all area office tenants. We have included several paragraphs and a link below to the entire article.

Within the past 12 months Choyce Peterson has been successful in representing area companies whose leases were expiring within 12 to 30 months from the time we started working with them. In one case we were able to cancel a tenant’s existing lease with 24 months remaining and immediately lowered their base rent, obtained free rent, and had the landlord fund the necessary Tenant Improvements to retrofit their space to their current and future needs. In another case our client renewed and we negotiated one year of free rent, a lower base rent, and a $50.00 per square foot Tenant Improvement allowance funded by the landlord. In both cases we delivered bottom line results to our clients.

Renew or Relocate? Incumberant Landlords Willing to Sweeten the Pot
In Periods of Subbornly High Vacacies & Tight Financing, Tenancy Still the Trump Cards in Negotiations

Tenants, too, have a vested interested in staying put. While in this case, the tenant is part owner, in other cases, tenants face a disruption in their business and significant relocation and operational costs if they leave a good location. But the market reality is that there are good deals to be had out there as vacancies remain stubbornly high and money for refinancing commercial properties remains hard to come by. As a result, tenants are clearly making the decision to at least shop around.

“In sectors like the office market, we’re finding tenants taking the opportunity in a soft market to upgrade office image and pick-up additional amenities by moving from a Class B building to a Class A building, generally with minimal increases in their rent. The term you hear tossed around is ‘flight to quality,’ ” said Ryan Walsh, principal of RadatzWalsh Inc. in Edina, MN.

“To compete with the market, landlords are offering up free rent to keep tenants, somewhere around one month per year of the lease, (net or gross) depending on the situation and other terms,” Walsh said. “Also, improvement money is being spent to upgrade finishes and make spaces more functional on extensions. Usually $10 to $20/square foot for 3- to 5-year deals and some additional credits or rent reductions if the space can be used as is.”

“It is all on a case-by-case basis,” Walsh said, “but the savvy landlords factor in the costs of having the space sit vacant for a while, tenant improvements for new groups and other transactions costs. They generally come to the conclusion that it is in their best interest to work hard to keep a good tenant that they know pays rent on time.”

http://www.costar.com/News/Article/Renew-or-Relocate-Incumbent-Landlords-Willing-To-Sweeten-the-Pot/135255

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UPDATE: Available Office Space South of Westchester Avenue; East of Downtown White Plains

February 9th, 2012

As we settle into the 2012 year, we have continued to monitor the market within 4 miles South of Westchester Avenue on the East side of Westchester County with buildings that have at least one available 10,000sf suite and the market has maintained stagnant.

The results are as follows:

City # of Buildings # of Suites
Harrison 2 7
Rye 3 6
White Plains 1 3
Totals: 6 16

The buildings are:

Harrison:
- 450 Mamaroneck Avenue
- 500 Mamaroneck Avenue
Rye:
- 120 Old Post Road
- 411 Theodore Fremd Avenue
- 555 Theodore Fremd Avenue
White Plains:
- 1311 Mamaroneck Avenue

*Please note the following:

• Today there are 6 buildings that meet the above criteria, wheras in March there was 7 and 6 in September.

• There are sixteen 10,000sf suites available, whereas in March there were 15 and 17 in September.

• The above six Class A buildings have a total of 476,743sf available: 430,325sf available on a direct basis and 46,418sf available on a sublease basis.

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Posted in Westchester County commercial real estate, commercial real estate | No Comments »

 

Article States Office Rents Are Rising in Several Markets:

February 2nd, 2012

Will the Fairfield/Westchester Market Follow This Trend?

We thought you’d be interested in the below article as published on CoStar. Please note that we have only included paragraphs that pertain to the office market. It is our opinion that our regional market has lagged that of the “hot” markets noted below, but predict that these trends will start to occur in our area in the late stages of 2012. For the complete article please click on the following link: http://www.costar.com/News/Article/Landlords-Poised-to-Regain-Upper-Hand-In-Recovering-Office-Market/135292

Landlords Poised to Regain Upper Hand in Recovering Office Market

2011 Sees Office Leasing, Sales and Pricing Improve Amid Growth In Office Jobs and Rising Tenant Demand. Outlook Has Landlords Preparing to Sing: “Our Day Will Come”

Offce space absorption doubled during 2011 as the office-using job base expanded and vacancies declined across nearly two-thirds of U.S. submarkets, CoStar Group reported this week in its Year-End 2011 Office Review & Outlook. The report presented to CoStar clients found that positive momentum in office fundamentals and the continued absence of new construction is expected to result in higher rents for building owners over the next few years.

CoStar reports the outlook appears to increasingly favor building owners in coming years as the cycle continues.

“To sum it up, for the office market, we’re just now getting started. Now is a good time to be an office investor,” said Walter Page, director of research for Property and Portfolio Research (PPR), CoStar’s analytics and forecasting division. “We expect vacancy to continue to decline through 2015, and when you have declining vacancy rates, you can raise rents, returns are better, and for an investor, that’s good news.”

CoStar Group founder and CEO Andrew Florance noted that, although overall employment growth has been anemic, the U.S. posted a solid 1.7% gain in office-using jobs, led by technology and energy markets such as Seattle, Boston, San Francisco and Dallas.

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The 2012 Norwalk Office Market

January 26th, 2012

As we begin the New Year, we are still plodding along the bottom of the office space market in the Lower Fairfield County region. Attractive rental rates, generous amounts of free rent and large tenant improvement allowance continue to exist in today’s market, although on a building-by-building basis.

In Norwalk, the following eight buildings offer tenants who are renewing and/or relocating a wide variety of choices:

• Merritt 7: This 6 building complex consisting of 101, 201, 301, 401, 501, and 601 Merritt 7 now has 324,000sf available on a sublease or direct basis, with available suites ranging in size from 1,500sf to 50,000sf.

Due to a change in their on-site management and brokerage teams, this complex is ready to roll-out an aggressive marketing package in 2012.

Amenities in this complex include an on-site cafeteria, fitness center, conference center, concierge, newsstand, barber shop, car detailing, dry cleaners, ATM banking, dual fiber loops and a shuttle to the South Norwalk train station.

• 535 Connecticut Avenue: This 173,000sf building was recently sold. With a new ownership/management/leasing team in place and an extensive renovation of much of the common area completed, this building will be offering very attractive rental rates to new tenants. With a fitness center, cafeteria, building conference room, and concierge all on-site (which is unusual for a building of this size to have this many amenities), we expect this building will now aggressively compete with other Norwalk buildings.

• 383 Main Avenue: This 255,00sf building has 53,000sf of available space with units ranging in size from 2,000sf to 31,000sf. This building competes directly with the Merritt 7 complex and promotes its on-site concierge, cafeteria, fitness center, and covered parking.

The first half of 2012 remains an excellent time for tenants who are searching for new office space or negotiating renewals to secure attractive short and long-term lease positions offering flexibility via expansion, contraction, renewal and cancellation options. We predict, however, a tightening in some markets and on a building-by-building basis, with fewer incentives available as we move through 2012.

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The 2012 Greenwich Office Market

January 19th, 2012

Attractive rental rates, generous amounts of free rent and large tenant improvement allowances continue to exist in today’s market, although on a building-by-building basis. The area of Greenwich with the most availability for tenants is the western portion, which lies at the border of Westchester County along the West Putnam Avenue corridor.

Eleven buildings located in this area of Greenwich will see leasing activity in 2012:

• 777 W. Putnam Avenue: An extensive renovation of the building was completed in 2011 consisting of new mechanicals/HVAC, roof, lobby, elevator cabs, common bathrooms, and landscaping. With over 79,000sf still available, this 130,000sf building with amenities such as a concierge, shuttle to train, food service and covered parking is poised for continued leasing activity.

• Greenwich Office Park: This 9 building complex consisting of 425,720sf has 102,085sf available on a sublease and direct basis. Suites vary in size from 2,200sf to 13,000sf. The complex has an on-site fitness center and cafeteria, and offers a shuttle to the train station.

• 500 West Putnam Avenue: This 115,000sf building is offering two large blocks of space, mainly 19,335sf and 20,617sf. We would expect the landlord would subdivide the space into smaller units.

Buildings within a half mile of the Greenwich train station enjoy a lower vacancy rate than the balance of the market and was the first market segment to tighten.

The first half of 2012 remains an excellent time for tenants who are searching for new office space or negotiating renewals to secure attractive short and long-term lease positions offering flexibility via expansion, contraction, renewal and cancellation options. We predict, however, a tightening in this market on a building-by-building basis, with fewer incentives available as we move through 2012.

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The 2012 Stamford Office Market

January 12th, 2012

As the national economy continues its slow recovery, and we begin the New Year, we are still plodding along the bottom of the office space market in the Lower Fairfield County region. Attractive rental rates, generous amounts of free rent and large tenant improvement allowance continue to exist in today’s market, although on a building-by-building basis.

In Stamford, the following buildings should influence the market significantly:

• 695 East Main Street: With Building & Land Technology’s recent purchase and planned extensive renovation of the building we expect leasing activity to commence and continue throughout the year.

• Harbor Plaza – 181, 208, 232, 250, 262, & 290 Harbor Drive: With George Comfort & Sons recent purchase of the complex we expect an aggressive marketing campaign and extensive renovations to the complex with over 440,000 square feet available in buildings 181, 208, 262, and 290. Look out for several deal announcements in 2012.

• 1 and 2 Harbor Point: These buildings are well-positioned for some robust activity as they are the only brand-new buildings in the area and will benefit from the continued development of the South End that also includes new residential development, restaurants and retail.

• 3001 Summer Street: The building has undergone an extensive renovation in 2011 and is well-positioned to land some significant deals in 2012.

Buildings within a half mile of the Greenwich and Stamford train stations enjoy a lower vacancy rate than the balance of the respective markets and were the first market segments to tighten.

The first half of 2012 remains an excellent time for tenants who are searching for new office space or negotiating renewals to secure attractive short- and long-term lease positions offering flexibility via expansion, contraction, renewal and cancellation options. We predict, however, a tightening in some markets and on a building-by-building basis, with fewer incentives available as we move through 2012.

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Posted in Uncategorized, business negotiations, commercial real estate, commercial real estate market | No Comments »

 

UPDATE: Office Space within 1/2 Mile of Stamford Train Station

January 5th, 2012

As we start the New Year, we have continued to track the availability of 10,000 square foot (sf) suites within one-half mile of the Stamford Train Station. Compared to last year we determined that the market has stayed fairly stable and the only major change this year is that there is no longer a Class B building that has a 10,000sf suite available. In April there were 27 suites, 26 in July and 33 now in January.

The results below show the amount of 10,000sf or larger suites available:

# of Buildings # of Suites
Class A 12 33
Class B 0 0

The Class A Buildings are:
- 300 Atlantic Street
- 400 Atlantic Street
- 2187 Atlantic Street
- 100 First Stamford Place
- 200 First Stamford Place
- 300 First Stamford Place
- 1 Harbor Point Square
- 2 Harbor Point Square
- 1 Station Place
- 201 Tresser Boulevard
- 680 Washington Street
- 1010 Washington Boulevard

The 12 Class A buildings have 1,140,644sf of available space, (823,571sf on a direct basis and 317,073sf of sublease space) versus 874,240sf in July and 913,239sf in April. The current vacancy rate of these buildings is 36%, which represents an 8.1% increase in availability since last July. It should be noted that the available square footage increased by 266,404sf, which represents a 30.4% increase since July.

The one Class B building that has dropped off the list is 1 Dock Street, which offered only 1 suite of 18,954sf back in July.

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Commercial Real Estate Timing

December 29th, 2011

The saying that timing is everything holds true for commercial real estate as well. Say you are planning “just to renew” your current space. Well, if you wait until just before your lease expires, you will lose any leverage you might have been able to create with your current landlord. Your landlord will know that you really have no time to look anywhere else, negotiate a lease, build-out the space to meet your specific needs, and finally relocate. They also know the number of concessions you will be able to achieve, from a low base rent to advantageous lease clauses, will be minimized.

Larger organizations will incur even greater penalties for procrastination because it may be more difficult to find alternatives in the market, and the need for business continuity may outweigh the ability to get the best deal. As a rule of thumb, organizations looking to renew or relocate who need 10,000 square feet or more should start at least 12 months in advance by hiring a commercial real estate broker. For 50,000 square feet or more, we recommend a year and a half.

Starting at the wrong time affects more than just negotiating leverage. It can detract from the thoroughness of the real estate search process, the number of factors you can take into consideration, and your ability to properly coordinate a build-out for new space or within your existing suite without impacting your business continuity. This, in turn, lowers the number of sites you can consider since a fair amount of available space is raw or old and needs construction to become “business-ready.”

Your commercial real estate lease can be one of the most expensive items on your balance sheet outside of employee salaries. So, give your real estate decisions the attention they deserve!

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