In Ohio, Office Tenants In Stronger Position As Vacancy Rates Climb

This is not necessarily being repeated all over the United States, proving the adage that all real estate is local, local, local.

However, in much Ohio, particularly Central Ohio, office tenants are being offered significant opportunity for better renewal rates, being wooed to new office space, or even renegotiating existing leases. Depending on where you are, your economy and the amount of product available (leaseable space) dictates availability and per square foot rents.

When it comes to new space and early lease renewals, renters are in the driver's seat. Moreso in fringe areas of Columbus and suburbs where isolated office buildings that were to be the anchor for further development are, well . . . still isolated and often empty.

Unlike multifamily investment in the area, which is stable and lacking all the giveaways we used to see (free washers and dryers, free microwaves, free this free that for signing a lease), office owners are offering a number of incentives to get businesses to locate in their properties. This includes free rent for a certain number of months at the beginning of the term, low base rents and increases in amenities.

According to Schenk Company Inc., which represents tenants exclusively, in Central Ohio vacancy rates ranged from a low of 15 percent in southwest Central Ohio, to 15.1 percent in the central business district of Columbus, to highs of 23.9 percent in outlying (what I call fringe or edge) areas. Southeast Central Ohio had the highest office vacancy rate at 25.1 percent.

The key is knowing where you want to locate or expand your business. Pretty much everyone, with the exception of office operators who have high occupancy rates, is willing to be creative. Your experienced commercial/investment real estate agent can help you move through the minefield in tenant representation, and prevent office renters from making mistakes that could cost them later.

New Scam Hits Real Estate

Now the National Association of Realtors is the target. Well, actually, unwitting renters are the target, but legitimate Realtors might be dragged through the mud through no fault of their own on this one.

The National Association of Realtors' name is being used illegally as part of a property rental scam, according to the National Association of Realtors and law enforcement. In this scam, rental property is offered to consumers, who are led to believe that NAR is functioning as an intermediary to receive rental deposits from prospective tenants and, upon receipt of the deposit, to deliver the keys to the property to the tenant.

The tenant is instructed to send money via Western Union to NAR's purported agent, in the United Kingdom. If you have encountered this scam, be advised you may file a complaint with the Internet Crime Complaint Center, sponsored by the U.S. Federal Bureau of Investigation and the National White Collar Crime Center.

When this kind of stuff hits, it drives me crazy. For those who are considering real estate as an investment, are wholly invested in such, or who are tenants and who got burned one way or another, this kind of scam hurts everyone in the industry.

Definition For The Day

Here is a word that comes up from time to time, and buyers and sellers -- particularly investors involved in a 1031 tax-deferred exchange -- have wanted to better understand what it means.

The phrase is: "Subject To"

Here are two definitions:

a. The act of acquiring property with the existing financing and without formal assumption.

b. A term in a contract creating a condition which must be satisfied prior to the close of the transaction.

As an investor, be sure you are working with an experience agent who understands the intricacies of commercial/investment real estate.

My Brokerage Is Changing Its Name

Well, we are changing our name . . . slightly.

I am now part of Prudential Commercial Real Estate. Why,? you ask . . . Don't you know you are already with Prudential?

Of course I know! Its just that the letters "CRES" were part of the name until this week. It was confusing for many, as the acronym stood for "Commercial Real Estate Solutions." See the redundancy?

It may all seem silly and no big deal. Until you think about all the stuff that needs to be changed. Because it is a legal matter.

Anyway, I was out yesterday peeling vinyl off some signs at my listings. And I am in the process of making sure all of my online signatures, email, blogs and social network sites reflect the change as well. It all has to be done this week. Other silk screened signs may have white duct tape used to cover the letters no longer being used until new signs can be ordered. Hmmm....

For some it sounds simple. Its not. Thankfully its someone else's reponsibility to change over business cards, letterhead, envelopes, email addresses, office websites, remind agents to change their individual websites, marketing literature, bound property marketing packages, brochures, consumer guide's, investment discussion pieces, electronic presentations, etc., etc., etc.

Oh what fun . . .

Respectfully submitted,

Brent Greer
Prudential Commercial Real Estate