Life in Austin: How Commercial Real Estate Influences this Texas Powerhouse

Despite the ever-advancing wave of globalization in this connected world, no two cities are the same. While many share similar economic and development trends to cater to new and burgeoning industries, their location, culture, and specializations tend to affect the shape of a city’s future more than any other factor – save one.

As with so many growing cities, the impact of commercial real estate can have a tremendous impact on the future of a city, and there’s no better example of this than Austin, Texas. Austin rivals that of some the most competitive commercial real estate markets. Recent reports show that office space in Austin is more expensive than other cities including Seattle, Portland, and San Jose.

Similar to many other growing cities in the United States, the core of Austin’s business community is centered around the downtown hub, or the Central Business District, which comprises the majority of office spaces for finance, professional services, technology, and healthcare companies located within the city.  Not surprisingly, rates here are much higher per square foot/year than other locations outside the CBD, with the average base rent reaching almost $40 per square foot last year. Tack on operational expenses and that number reaches $62 per square foot – double the average from a decade ago. For companies operating in competitive industries where perks, benefits, and professional culture can mean more to employees than a high salary, opening up shop in downtown Austin has its strengths and its drawbacks. While public transit is busiest and most accessible here, traffic during rush hours is at its worst in the downtown area and parking is extremely limited. On the other hand, the area’s shops, restaurants, and nightlife are within easy reach of the office, granting a work/play lifestyle so many young professionals seek.

The other major submarkets in the Austin commercial real estate world include the Northwest and Southwest submarkets, where lower monthly rates and more flexible lease terms are easily found. Furthermore, these two markets are more diverse in their listings and available space than the CBD, allowing companies with need for larger-scale facilities a greater freedom than the cramped spaces common throughout downtown Austin.

The Northwest submarket has only begun to grow in earnest recently, and much later than its neighboring commercial real estate submarkets. Despite its serene and quiet area, the presence of tech companies is unmissable. Located within minutes are many high-tech companies, including 3M Corporation, Apple and Flextronics. Expansive urban campuses, high-end eateries and craft cocktail lounges, wellness spas and gyms are scattered throughout the neighborhoods in Northwest Hills.

Moving to the Southwest submarket and neighborhoods like Oak Hill, Circle C and The Meridian, Austin, lower commercial real estate rates and some of the area’s most beautiful scenery have pulled companies from the downtown area. With the presence of industry leaders like Logitech, AMD, and Solarwinds, the Southwest submarket is a less walkable area than downtown Austin, resulting in slightly higher lease terms than elsewhere around the city center. One reason for this is that existing commercial real estate properties in this area contain extra amenities like food courts, onsite gyms, and  access to tons of outdoor recreational options to make up for the relative lack of access compared to similar downtown properties.

If you’re seeking office space in Austin or considering expanding your operations to a new location, you can find everything you need to know about the Austin commercial and office real estate market right here on OfficeSpace.com.

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. 

Largest Office Leases via CBRE

  •      Bank of America leased 130,311 square feet at 201 E Washington Street in the Central Business District
  •      Vanguard leased 127,787 square feet at 16425 N Pima Rod in the Scottsdale Airpark/Desert Ridge submarket
  •      Allstate subleased 100,622 square feet in Allred Park Place Central located at 1450 S Spectrum Blvd in the Southeast Valley
  •      Arizona State continued to expand its campus by leasing 60,203 square feet at One Arizona Center located at 400 E Van Buren St in the Central Business District
  •      McKesson Corporation leased 60,000 square feet at Chapparal Commerce Center II located at 5801 N Pima Rd in the Central/South Scottsdale submarket

Q1 2018 Top Office Sales via Lee & Associates:

  •      D.L. Long Properties purchased 1850 N. Central Ave from McCarty Cook & Co for $80,700,000. The Class A property is 485,687 square feet.
  •      Arch Street Capital Advisors purchased 2299 W. Obispo Ave from Everest Holdings for $39 million. The Class B office building is 180,480 square feet.
  •      The Orris Family purchased 9999 N 90th Street from Bahraqin Mumtalakat Holding Co. for $30.5 million. The Class B property is 92,562 square feet.
  •      Sentinel Real Estate Corporation purchased 8990 W Glendale Ave from Artis REIT for $19 million. The Class A office building is 106,418 square feet.
  •      Taconic Capital Advisors purchased 20401 N. 29th Ave from Cohen Equities NY for $18.5 million. The Class B office property is 138,540 square feet.

Q1 Office Market Key Takeaways via Lee & Associates:

  •      Total vacancy: 19.39 percent
  •      Year-to-date Net absorption: 686,469 square feet
  •      Average asking rents: $25.47 per square foot
  •      2,839,908 square feet under construction
  •      2,538,998 square feet of sublease space available

Cushman & Wakefield also reported that in the first quarter of 2018, vacancy in the Metro Phoenix office market was 16.8 percent – the lowest vacancy rate since the second quarter of 2008, when it rested at 16.6 percent. The office market in Phoenix also continued to experience positive occupancy growth and absorbed more than 849,000 square feet during Q1 2018. This is the largest net gain for the first quarter since 2006.

OfficeSpace.com makes finding and listing commercial property listings easy and simple. Tenants and brokers can search properties nationwide. List your commercial property space today for free to get in front of tenants and other brokers who utilize the site to create market surveys.

Don’t Forget These Five Must-Haves When Signing an Office Lease

You have found the perfect office space for your company and now it’s time to sign on the dotted line and make it official – but what things should you ensure that you have in that office lease? After the ink has dried on the lease, there is no turning back, so make sure you don’t forget these five must-haves when signing an office lease.

A Solid Understanding

Yes, you NEED to read the lease even though it is a long document. Do the definitions align with your understanding? If you don’t understand something in the lease, the time to ask questions is before you sign, not after. Make a special note to look at the terms such as the right to cancel. Many landlords will use standard leases that includes general terms for all leases. If you have negotiated specific things, you need to make sure those are included in the lease. Check the start date, end date, rent, rent escalation, and other special terms you negotiated.

The Best Possible Negotiations

Just because you have the lease in hand, does not mean you cannot continue to negotiate until you have the terms you want. Until the lease is signed, you have room to negotiate. When reading the lease, make a list of provisions that you would like changed and give it to your broker.

Knowledge of Your Responsibility for Capital Expenditures

Capital expenditures includes major structural expenditures like the roof, foundation, HVAC and any other major repairs and replacements necessary. The standard varies from property to property, but you should try to avoid signing a lease that places the burden of these repairs on the tenants.

Is the Lease Assignable?

Check to see if the landlord has the right to terminate the lease if you ask for an assignment. If you sell your business, you want to be able to have someone else take on the lease. Many businesses look at location as the biggest piece of value and some will try to assign a lease in order to get out of it, although the landlord will still want to renegotiate the terms with the assignee. If the landlord has the right to terminate the lease once you ask for an assignment, this could kill the sale. Negotiate for the landlord to remove this provision or allow it to be modified so that it doesn’t apply in the event that you sell your business.

Can You Sublease?

A sublessee is another business that works in your leased space under your lease terms. You pay the lease and the other party pays you a portion of the cost. A lot of landlords do not allow subleases, but if you want a sublessee, you will need to negotiate this with the landlord before signing the lease.

Visit our Tenant Education Center to learn more about the commercial real estate process .

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.

Understand a Younger Design Aesthetic

Office environments need to combine open floor plans with many gathering spaces and specialty spots, such as sound-proof conference rooms and spaces that employees can move freely between throughout the day. Even if your office has a traditional layout, you can still enforce collaboration by encouraging employees to operate out of some of your current meeting spaces. The greater face-to-face interaction, the more likely you will see an increase in collaboration.

Have a Start-Up Mindset

Maybe your office space isn’t a true collaborative layout, but that does not mean that collaboration isn’t possible. By using a fresh approach to promote a workspace that emphasizes a solutions-first mindset and innovation, you can implement cutting-edge technology that helps build flexibility and can change the spaces you occupy. Technology can help to connect all of your employees together, even if the layout of your office doesn’t allow for that. Tech like Zoom conferencing, Slack and many others can help to keep the office cohesive.

Tear Down the Walls

Opting for low walls and clusters of workstations that are smaller can encourage collaboration and utilize space more efficiently. Small conference rooms and huddle rooms can also help bring employees together for meetings, etc. An open concept floor plan is easy to accomplish when you tear down walls and join employees together. You don’t need to completely alter the look of your interior, but you do need to open the floorplan up to increase the flow of the office space.

Keep Things Flexible

Remote technology can enable employees to work and collaborate remotely. Google Hangouts, Google Docs, Dropbox and Evernote can all help encourage collaboration even in a traditional workspace. These products can also allow for employees to work from home and have greater flexibility. You can try to implement greater flexible technology to help increase collaboration within the workspace.

Amenities that Wow

Attracting a collaborative workforce is easy when you have a lobby and space that both welcomes and impresses. A closed-in office with dark furniture will deter any kind of collaborative group. These groups need amenities such as on-site gyms, on-site cafes and work spaces that are large enough for groups to gather and work together. Even in a non-collaborative office property, you can help encourage collaboration just by being creative with amenities and the overall design of the space.

Rail Yard Telecom Concierge® Now Available on OfficeSpace.com  

Access to fast, reliable internet is essential for any business looking for their next space. That’s why we’ve partnered with Rail Yard to provide prospective tenants with internet connectivity information. With Rail Yard’s Telecom Concierge®, OfficeSpace.com users can now access telecom services and quotes for properties across 40 cities!

Here’s what OfficeSpace.com users will see when they visit a listing on OfficeSpace.com:

Rail Yard Telecom Concierge on OfficeSpace.com – Example 

This feature allows OfficeSpace.com users to view available telecom providers servicing the buildings they’re interested in on OfficeSpace.com. Users can also compare service providers and request customized quotes in real-time directly on the website.

Check out the official announcement to learn more about our partnership!

4 Ways the Collaborative Workspace Movement is Impacting CRE

Collaborative workspaces are changing the way millennials work and ultimately creating a snowball effect that is changing the way everyone works. Recent studies reveal that over 1.2 million people worldwide have worked, or currently work, at a co-working space. In fact, Emergent Research forecasts that by 2020, co-working memberships will rise to 3.8 million people and 5.1 million by 2022. As collaborative spaces become increasingly popular, it’s not surprising that this has also impacted the commercial real estate industry in a big way – from increasing property demand for older buildings to establishing a brand new niche market.

Here are four ways the collaborative workspace movement is impacting CRE in both a positive and negative way.

Increasing Property Demand

The popular demand for collaborative workspace environments  is benefitting CRE by also increasing the demand for older properties. Many companies that prefer collaborative space will take old industrial warehouses and repurpose them into premier locations for their team members. In fact, recent reports show that there’s a clear shift in tenants’ preference for older office buildings, as the existing old-world charm and flexible, open layouts are attractive to those seeking a collaborative environment.

Along with these older spaces, companies can also utilize floors and areas of existing office buildings to offer more collaborative spaces for meetings, communal work areas, and so forth. Overall, this is increasing the leasing and sales action within the market, as many companies continue to demand large square footages.

Establishing a Niche Market

Co-working and collaborative spaces have also proven to benefit brokers in that this new trend has created a niche market. Commercial real estate is built on relationships and many building owners and brokers have established strong networks with companies looking for this particular type of space. What’s more, there are entire brokerages, websites and platforms built to help fill collaborative spaces.

Additionally, large co-working companies also have broker referral programs, allowing brokers to maintain the client relationship while still earning commission. As most companies outgrow co-working spaces, these tenants will likely need the broker’s services down the line when they’re ready to lease a more traditional space.

There is No Guarantee for Long-Term Sustainability

Collaborative spaces are generally not for long-term leases. Many companies will lease out these spaces for a short time period, which means there is no guarantee for long-term sustainability. Tech startup companies are the biggest utilizers of co-working space. The challenge that this brings to CRE is the question of who to lease the office space to and which businesses will be able to overcome any economic downturn. This can be a gamble for brokers and landlords to determine if the company will be able to uphold their lease if a time comes when the market takes a dip.

Joint Ventures Between Landlords & Operators

The success and profitability of co-working space has increased the partnership between landlords and operators. These two groups work together to buy, develop and reposition buildings to transform them into co-working space, which allows the opportunity for both the landlord and the operator to better monetize on this trend.

Co-working has altered the way startups and small businesses approach office space. This has helped to reduce vacancy rates while also establishing new companies in many markets. Co-working companies such as Regus and WeWork are some of the most desirable tenants in the market in this day and age, with valuations often surpassing the traditional brick and mortar landlords.

It Just Got Even Easier to Add Listings to OfficeSpace.com

While it has always been free and easy to add your listings to OfficeSpace.com, we’re excited to announce that it just got even easier!

Over the last couple of weeks, you may have been contacted about sending us your flyers, personal websites, or adding us to your e-blast. We now have a dedicated team that will update your listings at no cost or disruption to you. Simply send us your flyers, email us your company websites, or add us to your e-blasts – we’ll take care of the rest.

Office space in Phoenix, AZ map view.OfficeSpace.com map view (Phoenix, AZ)

Don’t forget – we do more than just office, so make sure to send us updates for all use-types! This will ensure that all of your listings are getting exposure to the hundreds of thousands of tenants and buyers who search our website monthly.

Getting started

Want to send individual flyers or add us to an e-blast? Email them to Jen Rhee at jen@officespace.com.  As our data quality associate, she’ll take care of coordinating your updates.

Have a company website with listing data and flyers? If you’d like us to start pulling from your personal website on a recurring basis, please fill out the contact form below. We’ll review it and add your website to our monthly update rotation.

Other ways to update:

Utilize a feed provider that partners with us:  OfficeSpace.com’s syndication partners include Buildout, Apto, and Realogy! If your firm utilizes one of those syndication platforms, email jen@officespace.com to confirm if you’re currently being syndicated and how we can help if you’d like to get set up.

Login and manage your data directly: Users will always have the option to login to OfficeSpace.com to add, manage, and update new and existing listings. Get started by logging into your account.

Broker Tools/Features Available to you

OfficeSpace.com Pro users will enjoy the following features at no cost:

Broker lead management page

  • Unlimited photos, floor plans & brochures.
  • Listing visibility on OfficeSpace.com’s sleek map search.
  • Data export capabilities – standard CSV format.
  • Caller intelligence for all incoming tenant calls.
  • Real-time lead management and easy-to-use reply feature.
Want more leads?

Join our Tenant Connect  program: Position yourself as the local expert in your market! Connect with tenants who are actively searching and grow your pipeline. On average, Tenant Connect brokers receive 4x ROI!

Feature your Listings: Get 10x more exposure of your listings with Featured Listings, and receive 13x more leads than free, basic listings.

Questions? Comments? Let’s chat!

Contact Jen Rhee at jen@officespace.com or reach us at 206-680-4545.

One Broker’s Enduring Entrepreneurial Spirit

Big Payoff with Tenant Connect for a MBA grad turned CRE broker.

Company: Berkshire Hathaway HomeServices Commercial Division
Markets: Cincinnati, Columbus, Cleveland, Dayton OH
Results:
– 60 closed transactions
– $250,000+ in revenue
– 30% revenue growth
– Increased tenant rep more than two fold

 

As an MBA graduate with an extensive business background in Finance and Operations, David Mussari is no stranger to entrepreneurship. In fact, it was his interest in entrepreneurial opportunities that became the catalyst for his development as a commercial real estate broker.

“I first got involved in real estate in the mid 1990’s as a personal investment strategy and very quickly became engaged with commercial real estate brokerage,” recalled Mussari. “I enjoyed the hands on approach to managing agents, commercial assets and the challenge in finding opportunities and adding value.”

In 2007, Mussari acquired a small franchise firm, Prudential Commercial Real Estate, and quickly grew it into the 5th largest Commercial Real Estate brokerage in the Tri- State area. He’s also the managing partner for Berkshire Hathaway HomeServices Professional Realty.

The Problem: Stuck in a Marketing Rut

Like many commercial real estate brokers, Mussari’s firm initially relied on traditional marketing practices to find clients. However, these traditional methods soon proved impractical for meeting the needs of a modern real estate business.

“It was time consuming and ineffective to try to broadly market or cold call on local businesses,” Mussari admitted. They also tried sending mailers to local business owners and purchased ads on Loopnet and Google Adwords, but realized that there had to be a better way.

“We wanted to connect with more local business owners that had a need for tenant and lease representation ​at the exact moment when they needed it,” recalled Mussari.

The Answer: OfficeSpace.com’s Tenant Connect

When Mussari was introduced to OfficeSpace.com‘s Tenant Connect in 2014, he didn’t have to think twice about becoming a partner. The program was not only addressing an immediate problem by providing the ability to connect with the active tenants in real-time, but it also aligned with his firm’s long-term objectives.

 “Tenant Connect aligned with our initiative to help local business owners secure better leases.”

“It made sense to help us meet our goal of being the go-to commercial broker in the market for tenant representation,” explained Mussari. “Tenant Connect aligned with our initiative to help local business owners secure better leases.”

When asked if he recalled any reservations about becoming a Tenant Connect partner, Mussari simply remarked “none”.

Since joining, Mussari and his firm have closed roughly 60 transactions and brought in over $250,000 in revenue through Tenant Connect. “​We have seen about a 30% revenue growth on our commercial business since joining Tenant Connect and our tenant representation has more than doubled.​” Apart from the revenue, Mussari emphasized that Tenant Connect has provided positive exposure in the marketplace for his brokerage and agents.

If there’s one thing that Mussari wants other brokers to know about OfficeSpace.com, it’s that OfficeSpace.com “operates with the best interest of the brokerage and business community in mind. Unlike other players in the commercial real estate aggregation category, they are fair minded and add value for a reasonable price.”

View David Mussari‘s full bio and profile page.

Learn more about OfficeSpace.com’s Tenant Connect.

New Partnership Brings Commercial Property Data to EDOs

We’re excited to announce that OfficeSpace.com has joined forces with Community Systems, a leading technology company dedicated to the economic development industry. Through this partnership, OfficeSpace.com‘s commercial listings will now be exclusively featured on economic development organization (EDO) websites across the country and visible to thousands of site selectors, brokers, and companies seeking commercial property data nationwide. 

How does this partnership benefit CRE brokers and and economic developers?

Nationwide exposure for CRE brokers: Brokers who list on OfficeSpace.com will automatically have their listings featured on over 260 economic development websites across 42 states. As the exclusive data provider for Community Systems, only brokers who list on OfficeSpace.com will receive this exposure. The property database will be embedded using Community Systems’ innovative software which is designed specifically for EDO websites and features a map-based interface, combined with sophisticated workforce and demographic data from ESRI and EMSI.

A reliable, comprehensive commercial property data source for EDOs: By integrating OfficeSpace.com’s extensive commercial property database and Community Systems’ robust software systems, the economic development community will now have a reliable commercial property data source (over 553,000 on-market office, retail, industrial, and land listings and a total of 1.2 million listings across the country).

A better solution for both EDO customers and brokers: OfficeSpace.com offers an easy way for brokers and EDOs to get their properties online on a national platform. Unlike other broker-to-broker websites, OfficeSpace.com directly reaches tenants and buyers through a user-friendly interface.

Check out the official press release to learn more about the OfficeSpace.com-Community Systems partnership.

Susie Algard Appoints Mark Ashida as New CEO of OfficeSpace.com

[SEATTLE, WA – Feb, 27th 2018 ] – OfficeSpace.com, the leading commercial real estate listing service that connects tenants and brokers, has announced that technology industry veteran Mark Ashida has joined the company as its new Chief Executive Officer, replacing founder Susie Algard. As CEO, Ashida will lead strategy, revenue and growth for the company. Algard will continue as Chair of the Board of Directors of OfficeSpace.com. Continue reading “Susie Algard Appoints Mark Ashida as New CEO of OfficeSpace.com”