Office Building Lease Rates

Both lease rates and building-for-sale prices are all over the map. And we are finding that most times the reason for what initially appears as an obvious market disparity is not easily reconciled with reality. Often vacant space is kept vacant by pre-bust financing arrangements. Landlords are simply prohibited by their bankers from lower rents.

However, some good properties are holding their rents near their pre-recession levels.

Okay, that’s not to say that landlord asking prices cannot be bettered, but killer deals in or on quality buildings are not as available to the average tenant or buyer as would the poor national economy presume.

So, our prediction for leasing for 2011 is:

For commercial office and retail tenants, the real bargains will be in the second tier of properties, where substantial vacancies exist. Some have minor physical challenges that in comparison to Class^? A seem to degrade the property from full value. There are plenty of opportunities in this arena, with a long term lease available most-times as a bonus to the bargain. We predict very slow employment growth in most service sectors that will keep rents at this historically low level at least until mid-2012. 

Buying Commercial Property

Finding a great commercial property investment is much more difficult in this climate of cheap leasing, in today's market the much better and risk-free bargain.

But there are a short list of interesting available properties to look at, and given enough time and accurate research, you can definitely uncover some good buys.

For a user, there are very interesting financing options that can seriously improve investment economics. We predict that, looking back in 5 years, this will have been a great time to invest.