Dallas commercial space demand has been very high for the past two years. Rental rates have been experiencing dramatic increases and unfortunately landlord concessions have decreased. This being said there are still good rental rates available for Dallas commercial space if you know where to look.
An recent example of a potentially negative situation for one of my good clients. Two years ago we negotiated an office lease in an A Class office building. The net effective rental rate was $22.35 including the estimated electricity and operating expenses. Their lease is up for renewal and the landlord increased their base rental rate by over twenty six percent.
When my client sign d the two year lease I warned them thatchy would expose themselves to a higher rental rat in 2016 and unfortunately I was correct. My client was looking for a shorter term lease again and the landlord wouldn’t entertain the proposal. Because I know the market and am aware of opportunities when they become available I went to work for my client to get them the type of lease they needed.
We performed an office space analysis and determined they wanted to remain in an A Class building and were not concerned about the negative impact of moving if they could offset the moving expense with a significant rental savings. They also needed the new lease to start the day after their existing office lease terminated. The Dallas commercial space lease could not be for more than a two year period. However, they would prefer a one year lease.
Knowing this information I went to work. I know that a direct lease would most likely not be an option since landlords are looking for a minimum three year lease in the present Dallas commercial space market. I knew of a few buildings that may consider a one year lease but they were not A Class buildings and my client was determined to have the same quality building that he currently occupies.
Dallas Commercial Space Sublease
This left me with the option to find a sublease. Because I have been in the commercial brokerage business in Dallas for twenty five years I revive notifications of sublease opportunities on a daily basis. I also have access to three databases with potential prospects for my clients. I say this because my experience tells me that no matter how well maintained a data base is it is only as current as its last update. Finally I have relationships with hundreds of Dallas commercial space brokers and we discuss opportunities in the DFW office market weekly.
I knew of a possible office sublease in an A Class building in the office market where my client wanted to locate. I contacted my client and took them to a sublease space that was in the building they previously occupied. This building is presently leasing for $28.00 per foot. After negotiations the sublease had an effective rate of $14.35 per foot. Additionally we were able to negotiate for them a month of free rent on a twelve month term and thirty days prior to move in to set up the Dallas commercial space. The sublease commenced the day after their present lease expires.
The lesson is that if you are aware of the office market and have the contacts it is still possible to get a great lease in Dallas. If you are looking for space on your own and are frustrated give us a call. We can help you locate the perfect Dallas commercial space.