Market Zoom: 10 Big Phoenix Office Deals That Closed in 2018 (So Far)

Office deals in Phoenix in the first quarter of 2018 were white hot, with a number of large sales and leases taking place. According to CBRE, the net absorption in the Phoenix office market reached 154,716 square feet with nearly 1.3 million square feet of gross absorption. 

Let’s take a closer look at a few of the big Phoenix office deals that closed at the beginning of 2018. 

Continue reading “Market Zoom: 10 Big Phoenix Office Deals That Closed in 2018 (So Far)”

Effective Strategies for Marketing Your Office in the Collaborative Workspace Genre

The way the workforce, particularly millennials, want to work is pressuring more companies to harbor office space that speaks to a more collaborative setting. The traditional cubicle life is no more and well-designed spaces are stepping in to take its place. Even if your current office space is not collaborative, there are effective strategies that you can implement to market your space to the collaborative workforce.

Continue reading “Effective Strategies for Marketing Your Office in the Collaborative Workspace Genre”

John is the VP of Sales at OfficeSpace.com where he leads broker relations and sales. Prior to being VP of Sales, he was the Regional  Director for the company. John has over 25 years of experience working in the commercial real estate industry. Before OfficeSpace.com, John was a commercial real estate broker for the Norman Company in Seattle, WA.

What’s The Most Important Service a Broker Can Provide a Tenant?

In order to better understand how closely brokers’ and tenants’ expectations aligned, we decided to ask the following question: What is the most important service a broker can provide a tenant?

Check out the responses below to see the top answers provided by both sides. You might be surprised to see the differences in the feedback we got.

What is the most important service a broker can provide a tenant? 

Top broker responses:

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Breakdown:

  • Market knowledge: 21% of responses
  • Locating a space that meets their needs: 15% of responses
  • Good communication/Timeliness: 13% of responses
  • Accuracy: 12% of responses
  • Lease negotiations: 10% of responses
  • Honesty: 7% of responses
  • CRE knowledge/ advice: 6% of responses

Top tenant responses:

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Breakdown:

  • Good communication/Timeliness: 37% of responses
  • Locating a space that meets their needs: 15% of responses
  • Helping them get a good deal: 12% of responses
  • Honesty: 8% of responses
  • Market knowledge: 6% of responses
  • Negotiation skills: 5% of responses
  • Access to hard-to-find listings: 4% of responses

So what conclusions can we draw from this?

Market knowledge may not be the most important attribute for a broker from the tenant’s perspective. While this was the number one response from brokers, less than 2% of tenant responses had market knowledge listed as most important broker service.

The second most popular response from brokers was locating a space that meets the tenant’s needs.  Tenants too felt that this was important, and it was a match for second place.  There’s really no surprise here, this is a universal expectation.  

Good and timely communication from brokers is essential for tenants, making this attribute the number one ranked response from tenants with 37% of the responses. Only 13% of brokers marked this as the most important attribute, ranking it the third most popular attribute among broker responses.

Tenants want to get a good deal, and they expect their brokers to help. This answer seems like a no-brainer, so we were surprised that there was a bit of a mismatch between the two groups. For tenants, this was listed in their top three responses. For brokers, this came in as the 12th most popular response with only a small percentage falling this category. We could dive into the differences of responses between landlord representative brokers and tenant representative brokers, and hopefully we would see a difference. However, if we take this at face value, brokers who leverage this attribute could have a big opportunity to attract new clients. 

Tell us what you think! Is this feedback different from what you had expected?

How Are Tenants Searching for Office Space?

Finding your first office space can be one of the most exciting, yet nerve-wracking experiences. The team here at OfficeSpace.com has interacted with millions of tenants who have been in the same position.

This is why in an effort to shed some light on the process, we recently surveyed tenants about their search experience. Part of what we found out was what we expected, while some responses took us by surprise. Here’s a look at what tenants shared with us about their CRE search experience.

How much time did you spend researching commercial real estate leasing online prior to connecting with a broker?

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When asked how much time they spent researching CRE leasing online prior to connecting with a broker, almost have of our respondents (45%) selected “within days”.

How many brokers did you reach out to before selecting one to work with?

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Over half of our participants (54%) also revealed that they had not yet selected a broker to work with yet. Of those who did, 32% said they reached out to 2 to 5 different brokers before selecting one.

If you have not yet selected a broker, where are you now with your space search?

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For those who had not yet selected a broker, 33% had told us that they decided to look for space on their own when asked where they currently were with their space search. 11% of the 33% who decided to look on their own also reported that brokers had not responded to their initial inquiries, so there wasn’t much choice.

How many spaces did you see, or plan on seeing, during your search?

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In regards to space searches, we also asked how many spaces they’ve seen or planned on seeing during their search. More than half (54%) said between 2 to 5.

Do you have a preference for working with a tenant representative’s broker or a landlord’s representative’s broker to help you find a space?

Screen Shot 2017-08-23 at 2.32.01 PM.pngWhen asked if they had a preference to work with the landlord’s broker or a tenant representative’s broker, 37% of our respondents did not know the difference between the two.  The majority of tenants did not have a preference (44%) while 14% preferred to work specifically with a tenant representative’s broker and 6% preferred to work with the landlord’s broker.

Did you end up signing a lease with the broker you decided to work with?

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Finally, over 66% of tenants said that they did not sign a lease with the broker they initially selected to work with. When we asked for their reasons, 50% had to do with a negative experience with their broker, 26% of the tenants had a change in circumstances in their situation and 18% were still looking for the right space.

We would love to hear from tenants and brokers on our research. Does this information surprise you or is it what you would have expected?  

Rates Continue to Improve in Seattle Office Market as Economy Strengthens

The year started on a high note for the Seattle office market with stronger vacancy and rental rates, as well as positive absorption by the end of the first quarter.

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With the strong economy in Seattle, vacancy rates improved to 13.50% compared to 13.68% in Q4 and 15% in Q1 of last year. Additionally, asking rental rates continued to improve to a high this market has not seen since Q3 of 2008.

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The quarter’s year-to-date absorption ended on a positive at 84, 809 square feet. Projected new office space inventory under construction jumped up to by 1.7 million square feet with two notable projects – 400 Fairview and Troy Block in Lake Union, 1007 Stewart Office Tower in Central Business District and Hawk Tower at Stadium Place in Pioneer Square.

To purchase the full quarterly report or for further information, please contact John Heimbigner at heimb@officespace.com.

OfficeSpace.com’s Seattle Office Market Q2 Quarterly Report

OfficeSpace.com released its Seattle Office Market Q2 Quarterly Report today to a steady market and significant office expansions.

Vacancy rates have remained steady rising slightly from 14.4% in Q1 to 14.5% in Q2 while rental rates increased slightly from $25.83 to $26.38 respectively.

The biggest change in Seattle is the anticipated major office expansion from Amazon.com in the Denny Regrade neighborhood. This expansion is expected to add 3,000,000 square feet of class A office space. Additionally, Seattle mayor Mike McGinn has proposed increasing the office tower limit to 240 feet, up from the current 124 feet in South Lake Union.

To purchase this report for more information on major expansions and a breakdown of absorption rates by submarket, please contact John Heimbigner at heimb@officespace.com.

Rates Don’t Improve, but Vacancy Rates Show Good Growth in Seattle Office Space Market

The year ended on a high note for the Seattle office space market in 2011.  Net absorption for 2011 ended just over 1.6 MM sq.ft, almost double the net absorption for 2010.  2011 also marked the best year since a high of 2006 that ended in a little over 3 MM sq. ft of net absorption.

While the overall vacancy rate for the Seattle market didn’t change dramatically over 2010, there is a good story once you dive into the details.  We ended Q4 2011 with 14.8% vacancy in the Seattle office market compared to 15.3% in Q4, 2010.  And while the changes don’t appear significant, there’s a story going on in the Downtown submarket.  Last quarter, several significant leases were closed with Amazon taking 386,000 sq. ft. and a total of over 800,000 sq. ft.  The impact of these leases definitely showed up when we looked at the Downtown area vacancy rates which dropped to 12.9% this last quarter compared to 15.1% in Q4 2010.

Average rental rates remained fairly steady for all of 2011 ending the year at $25.80 per sq. ft slightly lower than the $25.89 in 2010.  However, as the supply and demand paradigms shift due to lower office space availability, particularly of larger spaces in the Downtown area, we would anticipate this to have a positive impact on rental rates.