Yesterday I wrote an article for the website indicating how quickly I am seeing Dallas office rental rates increasing. While looking for high value office space for my new client I thought that I would look into a building that I placed a tenant in during the late spring of 2013.
Dallas Rental Rates Increase
We got a nice lease in a fantastic space for a three year lease term. The effective rental rate was $26.00 per foot plus electricity. I advised them to get a five year lease so they could lock in the rate but they choose not to have a five year term.
Today while reviewing rates the very same building I leased for $26.00 last spring is now quoting $26.00 plus NNN charges of $10.00. This makes the new effective rental rate for the tenants in this building to $36.00 per foot. These rate changes happened overnight and they are going to effect every tenant in this building within the very near term.
Dallas Office Rental Rates In Uptown
As I mentioned in my article yesterday some of the Dallas rental rates in the Uptown market are going to blow Dallas office tenants minds when the renew their leases this year. The market is very strong for landlords and they are dramatically increasing Dallas office rental rates.
What can you do to mitigate the damage to your firm and avoid these giant Dallas office rental rates. My favorite technique is to search for office space that people don’t want. In this market it the landlords want every square foot they have. I am talking about tenants that have relocated or need to expand before their office lease expires.
The Dallas office subleasing market is getting very strong. Tenants are looking for deals in office buildings and they are still there if you know where to look. You won’t find these deals calling off of landlord’s signs. They won’t tell you about a sublease in their building. You are going to need to work with a professional Dallas office broker that has the connections and monitors the various subleases that come available for Dallas office subleasing.
Many tenants are going to begin looking for other alternatives for office space as Dallas rental rates continue to increase. There are still some good values in the Richardson, East Plano Central Expressway and LBJ office markets. Some buildings are testing new pricing strategies and don’t be surprised if we begin to see upward pressure on rental rates in these markets within the next six months.
Dallas Office Subleasing
The interesting fact about Dallas office subleasing is that the actual negotiations on the space can be more difficult than a direct deal. I would suggest that a person who negotiates one office lease every five years real doesn’t want to learn how to make sausage when they are on the job. This negotiation can be stressful, for everyone involved, and it takes a veteran office broker to be able to complete an acceptable transaction.
High Dallas office rental rates are going to be with us for a while. Don’t try to fight it just be smart. Use all the resources that are available to you and the most important one is a professional Dallas office broker.