Five Reasons to Look for Office Space NOW

While COVID-19 is still having a historic effect on the economy, the commercial real estate market continues to move along. Granted, it can be challenging to arrange the nuts and bolts of identifying and touring space, but businesses that are willing to work through those challenges can reap some benefit. There are five reasons that this is a uniquely good time to find a tenant representative and look for office space if your business needs it.

1. It's Hard to Fall in Love

If you've ever toured office space, you know that the process is exciting. You tour beautiful buildings. The landlord representatives treat you like kings. If you're lucky, you get wined, dined and wined again. Everything is designed to make you think the space you see is the greatest thing ever.

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Now, with coronavirus, you're probably going to be on your own. There's no wining. There's no dining. And you might not even be able to close the door to get a quiet moment to think. You can see the space, to be sure, but the conditions make it hard for you to get overly enamored of a given space or building. This is a good thing since it makes it easier for you to make cool-headed decisions.

2. You've Got the Market (Almost) to Yourself

Most tenants are sitting this market out. Some have health concerns and are unable or unwilling to travel, while others are shut down by government fiat. Among those who could look at space, some don't have the budget to move and others are just unable to make long-term business decisions. This means that there are fewer tenants looking at space right now, reducing the competition for the best vacancies.

3. Landlords are Hungry

The owners of buildings are getting squeezed from both directions as a result of COVID. Fewer tenants are looking for space, making it harder for them to get new income from vacancies that are either extant or coming up soon. At the same time, many existing tenants that are facing business interruptions due to the economic turmoil being caused by coronavirus are paying rent slowly, partially, or not at all. This leaves landlords in a cash crunch that can be alleviated by new tenants. For this reason, they're excited to talk to you and your tenant representative.

4. It's a Great Time to Ask for Concessions

A stable tenant is always a good thing, but when no one else is coming in the door, it's a great thing. For this reason, tough times are usually great times to ask for concessions from landlords -- and we haven't seen times this tough for a while. If you can be flexible to meet the landlord's needs (which may include conserving cash in the near term), you may be able to negotiate generous concessions such as reduced rent, extended rent abatements, or favorable terms for future renewals. After all, when landlords compete for your business (and you're potentially the only one in town!), you win!

5. Concessions Could Go Further Now

Finally, what you get from your landlord can potentially stretch farther now than it did before coronavirus. First, some construction teams are looking for work, and you may be able to negotiate favorable terms with them. Second, the office space of the future could be more spaced out. An office with more physical space should have a lower construction cost per square foot. This means that TI allowances based on old high density design models could end up paying for a higher percentage of your total construction cost in an office with more open space.