"It's a tenant's market." What does that actually mean? To put it simply, the supply of space exceeds the tenant's demand/desire to fill it. Let's take it down one more notch. There is more space than there are tenants and this gives tenants more leverage in a negotiation.
We are currently in the section of the real estate cycle that is commonly known as oversupply. This is when the owners in the market place have built past the point where tenants readily fill the vacancies. This section of the cycle gives tenants more room to negotiate because they have a greater number of alternatives.
Tenants in this section of the cycle make many choices. They may:
-Neogitate for lower rates
-Improve the quality of their space through a move or tenant improvement allowances from Landlords
-Expand in their current location in exchange for a new lease
The key is how do Landlords entice the tenants into the one that s/he owns over another. If this is something Atlas Real Estate Advisors can answer for you please do not hesitate to call or visit our website at www.atlasrealestateadvisors.com.
Monday, March 2, 2009
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