The rate of unemployment was 9.8 % last week. Many owners have shut down their offices and now the busy commercial hubs are empty chambers with a few workers here and there. There’s a lot of vacant space and that too at very low rental charges. This is the time you could think of hiring office space. The rental charges are the lowest in a decade according to New York real estate research firm Reis Inc. The owners are trying their best to attract you and this is the time you could cash on the advantage that you have in the situation. They’ll be more open to negotiations. According to a Wall Street Journal report, the vacancy rate is about 16.5 % which is high in five years time.
Plummeting rents and rising vacancies spells more hard time for the real estate industry. There’s already a scarcity of credit in the sector. Apart from that, landowners are not going to make payments which will mean greater hassles for financial institutions which have already put around trillions in the real estate industry. According to Victor Calanog, Reis research director, “It means more losses for the banks because they will have to write off more bad debt.”
From the point of hirers, this is a time to rejoice because you are saving yourself that extra buck. You’ll be getting build-out expenses and free rents as some of the perks from the owners. This situation seems to be a short-term thing, but you never know. With unemployment on the rise, it seems the Rent Office Space situation will worsen in the near future.
According to Calnog, “Even though the technical recession may be over, the labour market typically takes anywhere from 18 to 24 months to bounce back in a consistent way. If employers are still shedding jobs, they are also going to shed space.” So, for those who think a recession is over, just wait a while before you think of rejoicing because it will take another 1 ½ to 2 years for the economy to recuperate.
A lot of vacancies are available in places where housing is low and in big industrial centres.
So if your hands are full of cash for office accommodation and you want to strike when the iron’s hot here are some suggestions that you can heed for renting.
Don’t get lured by offers for more space and long-term lease. These might fetch you some immediate concessions, but in the long run, you might lose out? What if the rents are made very high once the economy normalizes and you can’t afford to pay that?
Consult reliable real estate experts before you make a commitment to rent out a thing. There are a lot of complications involved in the terms and conditions of renting and hiring out space which you should be fully aware of before hiring. Ask your real estate expert to show you the best deals around.
Follow your lease agreement thoroughly. Don’t violate any rules as this might fetch you a lot of problems. Read the agreement carefully and get it clarified through a real estate expert and/or a legal professional before signing it.