Occasionally, I transact office deals even though my specialty is industrial — manufacturing and logistics warehouses.
Differences between the two commercial real estate genres are minimal yet vast.
Recently, a client requirement thrust me into the world of office leasing. You see, we fulfilled a need with a long-term agreement on a new warehouse building. An amazing space was procured with all of the modern amenities – except for one – enough office space to house the employees.
We encountered an owner unwilling to construct more offices. Why? Because the dollars needed to build wouldn’t yield an adequate return. Plus, once our guy vacates, the next occupant won’t find value. Solution? Find a suite of offices close by. Easy, right? Well, not so fast.
My expectation? We would find acute motivation and many viable choices. We’d just experienced a year of pandemic lockdowns, working from home and throttled demand for office space.
As we ventured into the market, I was amazed by the voracious pursuit of our tenancy. Wow! Compared with skimpy industrial avails and colleagues who don’t return calls, office space alternatives abound.
Akin to an episode of “The Batchelor,” we suddenly had 10 proposals and five more warming up in the pen. A red rose was the only thing missing!
But, as we toured the options, each had its negatives. The good news is, I believe a couple of the spots could work. However, those didn’t provide great column fodder.
So here it goes. Here are four ways to ensure your space remains VACANT.
As is: “Just take the space as it sits and we will discount the rent.” Good in theory, bad in reality. Moving a staff into a new location carries infinite variables, time constraints and pitfalls. Layer in some construction and an occupant will vapor lock. If you lined up 100 office tenants, one to two would be willing to undertake a refurbishment. The savings rarely offset the aggravation. Solution: Spend some money. Put the suite in move-in condition.
Tuppence: One of the stops was a scene from Mary Poppins. As we entered, a flock of pigeons massed the doorway. Feed the birds, indeed! Two thoughts occurred to me. “Man, this space has been empty a LONG time and how is the owner ever going to remove the months of guano?” Solution: Owners might want to visit their vacancies a bit more often. After all, it’s only tuppence!
Is Green Day performing? No kidding. At our first visit, I flashed back to a former address where I worked in the 1990s. Complete with burgundy and grey carpet squares, black aluminum door frames, parabolic light lenses and privates large enough for a Pentium processor and loads of paper files. I truly expected to be awakened as September ended. (For those not scoring at home, that’s was a hit by the band Green Day – but I digress.)
However, the good outweighed the bad here and this one emerged as the front runner. Solution: A quick coat of paint and eliminating the carpet in favor of a tripod with flooring choices would have cinched it.
Someone didn’t get the memo. If the tenant occupying the space you’re touring isn’t aware they are moving… Yeah, that’s uncomfortable. Especially since no one met us at the building to explain the situation and buffer the stares. At least the layout there was decent.
So, if your desire is a vacancy, simply follow these four steps. Don’t spend any refurbishment money, never visit your suites, leave any potential to the imagination, and don’t require a representative to attend tours. Guaranteed success!
Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104.
