Printer Friendly

Owners adapt leases to meet tenant needs.

Since the American economy is consumer driven (albeit with lower octane gasoline), the heart of any marketing strategy is predicated on identifying the needs of your customer and satisfying that need. To that end, many of us in the New York Metropolitan market have taken steps to create and offer space terms more suitable to the needs of the existing tenant base. Many floors previously offered solely as full floors have now been divided or offered as 'divisible'. But how many of you have gone the extra step and created readyto-go ' executive' space retrofitted with conference rooms, telephones and furniture suitable for small businesses and individual entrepreneurs.

In our experience, the 'Executive Space Program' effort has been intensive but the rewards equally as great. Two and half floors of space have been rented in a Penn Station area building not at the prevailing $15 per square foot but at about $32 per square foot - more' than double. Of course, the costs associated in operating such an operation are greater too.

Other ideas for remarketing space for the existing tenantbase might involve realistic remeasurement of vacant space. Not more but less! Tenants all know that spaces 'grew' during the 80's. Maybe it's time to present measurements as they really are or at least have them conform to the Real Estate Board's method of calculation. Would not your prospective tenant view this more favorably than some bloated figure which he now is forced to accept but will 'adjust' by negotiating down 'deal with a tenant, examine and review your lease clause package and escalation policy. Might you be better off waiving a "Specific Performance ' clause or exchanging it for a 'Good Guy' clause (the tenant personally guarantees the lease payments only for that period of time he actually occupies the demised premises). We see a general trend towards tenant flexibility i.e., greater number of option periods. Also, tenants still shy away from penny-for-penny escalation riders and are more likely to accept a preset percentage increase in rent (say 4 percent or 5 percent) even though this is more costly to the tenant under present conditions.
COPYRIGHT 1993 Hagedorn Publication
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Commercial Sales & Leasing; leases for commercial space in New York, New York
Author:Bernstein, Asher
Publication:Real Estate Weekly
Date:Mar 24, 1993
Words:354
Previous Article:For sales: 1993 year of opportunity.
Next Article:Non-disturbance clauses key for tenants today.
Topics:


Related Articles
Keeping tenants in a buyer's market.
Big deals spur renewed confidence.
Court rules landlord need not permit sub-subleasing.
The new deal.
Office condos require well-designed plan.
Lease negotiation process evolving.
Agent loyalty key in all market climates.
Informed owner reps facilitate leasing.
White Plains gets 2nd look as Manhattan tightens.
Ever-changing rules muddy the market.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters