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Why Now Might Be the Best Time to Look for New Office Space

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Many companies are sitting in their hands while keeping track of how much Office space They really need Hybrid work environment.. However, commercial real estate brokers say the landlord is now ready to make a good deal as the market is slowly recovering.

According to insights from real estate market research firm CBRE, rent vacancy rates are not expected to return to the 30-year average of 15% until at least 2026, but leasing activity is recovering, for a total of 45.8 million. It’s over square feet. 26 percent from last year. In addition, the average total asking rent increased 1.2% to $ 35.10 per square foot. The improvement in office demand will be the largest in the markets most hit during the recession, including parts of Manhattan, Chicago, Seattle and Dallas.

Although the market is becoming more and more competitive, many companies are still hesitant to make major changes without more reliable predictions about when and how many employees will return to the office full-time. Julie says she doesn’t want to waste time, effort, and resources to do it. Welan, the global head of the occupiers, considered CBRE’s leadership.

According to a recent survey of companies using 207 offices worldwide by CBRE, more than 70% expect to be fully back in their offices in 2022. Those who need a part-time return can expect a return by July. And most of the people who need a full-time return are already back.

This suggests a steady increase in overall office occupancy, especially for tech and financial services companies that can afford it, Whelan says. Most companies will do so, so if you’re looking for miniaturization, you should move especially fast, she says. According to CBRE’s insights, remote work has reduced office usage per employee by 9% in baseline scenarios.

Get a deal

Companies looking to bring employees back to the office are looking for attractive facilities and flexibility, including complimentary meals, a comfortable space for socializing and relaxing, and a fitness studio. Robert Ribani, president of Black Lion Investment Group, a Los Angeles-based real estate investment company, said:

In Los Angeles, for example, Rivani says that pure corporate areas with vast, traditional office spaces, or areas in more suburban locations, have lost tenants to smaller spaces in more bustling districts. For example, in the first quarter of 2022, office vacancy rates across LA declined, while downtown vacancy rates rose to 22.4%. CBRE..

However, in Miami, which experienced a population boom during the pandemic, demand surged in downtown office spaces and areas such as fine restaurants, bars, and Brickel to market nightlife. Absorption rates rose to a record high of 6.8 million square feet in the fourth quarter of 2021, and overall office vacancy rates fell to 3%. CBRE..

“The high end of the market rebounds faster and gets tighter, so if you wait too long, you may not be there when you need it,” says Whelan.

Before jumping the ship to a new location, of course, it is worth negotiating with the current landlord to see if they are willing to reduce rent or offer other incentives. Rivani often hears that landlords offer shorter rental periods, free rents, and car loans to borrow money from renters. For new rental agreements, some landlords require a small deposit of one or two months instead of the usual four or six months, or insert a “Covid pause” clause. If you are not ready to move in, you can negotiate a renovation.

Most business owners have a trading period of 6 to 18 months before the market tightens, and of course, it could change if the pandemic experiences another wave, Whelan said. It may seem like a long time, but consider or budget now to see if doing an office migration is a wise idea right now, not later. It is recommended.

“Landlords are much more willing to negotiate free rent periods, tenant improvement allowances, etc., and in some cases they are willing to be hit,” Welan said. So if you’re looking for it, now may be the perfect time to make a leap forward.

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