Now's a good time for tenant reps.There is no shortage of complaints about 2003's low velocity real estate market in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of today. Rents are down, and space absorption is negative, on top of a surplus of available space. The "economic downturn," as most people refer to it, has greatly impacted the real estate market in Manhattan. Employment in the city has dropped by 1.7% from March 2002, to an unemployment rate of 8.5%. These numbers create negative absorption. Though Manhattan may not be in an enviable en·vi·a·ble adj. So desirable as to arouse envy: "the enviable English quality of being able to be mute without unrest" Henry James. position, in terms of its real estate market relative to five years ago, things aren't as bad as they seem. Despite all the complaining (most of it from landlords), I think it's the absolute best time to be a tenant rep. Here are a few reasons why: * Tenants in the market: Because this is a tenant's market, any opportunistic opportunistic /op·por·tu·nis·tic/ (op?er-tldbomacn-is´tik) 1. denoting a microorganism which does not ordinarily cause disease but becomes pathogenic under certain circumstances. 2. company in New York right now should be considering how to benefit from it. Tenants are hiring creative brokers who can guide them into capitalizing on this weakness through early renewals or lease restructuring. These types of transactions allow tenants to lock in highly favorable rents and flexible lease terms. Many of the restructures completed of late include the early return or reduction of security deposits. This was relatively unheard of Not heard of; of which there are no tidings. Unknown to fame; obscure. - Glanvill. See also: Unheard Unheard three years ago. Lease restructures which benefit both tenants and landlords are regularly completed nowadays. Tenants save money on transactions while landlords benefit from this historic period of low interest rates. In addition to restructuring leases, many of our tenants are taking a "flight to quality," and using the opportunity presented by decreased rents to upgrade their space. * Downtown opportunities: Manhattan below Canal Street Canal Street may refer to:
v. starved, starv·ing, starves v.intr. 1. To suffer or die from extreme or prolonged lack of food. 2. Informal To be hungry. 3. To suffer from deprivation. landlords and significant incentives still available for companies who relocate or renew leases, Downtown has become a hotbed hotbed, low, glass-covered frame structure for starting tender plants. It differs from a cold frame only in that the soil is heated—either artificially as by underground electric wiring or steampipes, or naturally with partially fermented stable manure, which of activity for tenants and brokers. Without the incentives being offered Downtown it is highly unlikely any of the deals would have happened. The only unfortuante consequence of this activity is that it has drained SoHo of most of its growing companies * Deal volume: Absorption is still negative and fewer deals are being completed now than four years ago, but transaction volume is on the rise from where it was a year ago. While much of this may be due to pent up demand, it still means that there are not only tenants in the market, but there are tenants in the market who will make deals; tenants who recognize that this is the best opportunity they've had in a very long time, and they're not going pass on it. In fact, many tenant brokers have never been busier. * Alternative clients: Not-for- profits, specifically schools, have increased their need for space. Presently, we are in the market with 200,000 SF of requirements for these clients. They are ALL growing, since the dislocation dislocation, displacement of a body part, usually a bone. When a bone is dislocated, the ends of opposing bones are usually forced out of connection with one another. In the process, bruising of tissues and tearing of ligaments may occur. in the economy has caused a lot of people to go back to school. Compelling deals, low interest rates--especially for IDA Ida (ē`dä), city (1990 pop. 91,859), Nagano prefecture, central Honshu, Japan, on the Tenryu River. It is an agricultural market and railway junction. financing and growing enrollment have lead to significant growth in this sector of the market. In the end, what principally drives the real estate market in New York, or anywhere else for that matter, is the requirement to physically sit an employee at a desk or in an office. Therefore, the real estate market in Manhattan won't see any significant growth until there is a change in business volume, leading to a decrease in the unemployment rate. With 80 million SF available in Manhattan, current market conditions will probably remain intact for at least the next 24 months. Until then, however, the current market affords opportunities to owners and tenants alike. This is good news from the perspective of the real estate brokers. In order to be successful, you need to be able to adapt to the changing circumstances of the market. Just as an economic downturn weeds out the weak companies from strong, a competitive real estate market allows experienced, creative tenant brokers to take market share from other brokers. Creativity allows one to make the type of value added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. transactions that engender en·gen·der v. en·gen·dered, en·gen·der·ing, en·gen·ders v.tr. 1. To bring into existence; give rise to: "Every cloud engenders not a storm" long-term loyalty and gratitude from clients. |
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