You are here

Why Do Office Tenants Relocate?

10/09/2014
jeffrey weil, jeff weil colliers, colliers san francisco, office leasing

Some need more space and a landlord is unable to accommodate that; a tenant may need to downsize at the end of a lease term and existing space is not easily divisible; a tenant might want to be in the newest fancy office building with more bells and whistles; or it may have a significant rent reduction opportunity through relocating. Perhaps a tenant’s way of doing business has changed and sometimes it is more efficient to move into custom-designed space vs. endure in-place reconstruction which can be quite disruptive. A new president or CFO might want to change the company image through relocation, or other factors such as public transit, restaurant and retail amenities, or client proximity might also have an impact.

In talking with my fellow office leasing specialists around the country, other than with a handful of corporations located in areas such as Houston, San Francisco, Santa Clara and the oil fracking regions, for the most part, there is almost no new office construction today. Firms are “hunkered down” and not expanding, CFOs are not jumping ship with the velocity they did prior to 2007 and 70 percent of all office tenants renew leases as a result versus relocation. This is usually a WIN-WIN for both landlord and tenant, particularly if the tenant is represented by a tenant rep specialist, as the $30 to 50/rsf (or more) cost savings (or once there is a vacancy) can be shared between landlord and tenant on the renewal. When the tenant doesn’t have its own representative, it is usually a WIN (landlord)-win (tenant) as usually the landlord pockets the lion’s share of the savings. Am I biased? You bet!

--

By: Jeffrey Weil

Executive Vice President | Colliers International - Walnut Creek

Jeffrey Weil is an executive vice president for Colliers International Walnut Creek. Mr. Weil has specialized in the sale and leasing of commercial properties for 38 years and has achieved CCIM, SIOR and NACORE’s Master in Commercial Real Estate Services with Honors (MCR.h) designations.

jeff weil, jeffrey weil, jeff weil colliers, jeffrey weil colliers, jeff weil colliers international, jeffrey weil colliers internation, colliers san francisco, colliers bay area

Email Jeffrey: jeffrey.weil@colliers.com

Follow Jeffrey on Twitter: @jeffreyweil

Follow Colliers International on Twitter: @colliersintl

More From Jeff Weil:

More San Francisco Office Stats to Add to Your Late-Night Reading Stack

 How Come Tech Companies Have All of The Fun?

Open Office Space: What Are The Pluses and Minuses? 

Foosball and Ping Pong Foster Creativity and Collaboration 

Want real estate news on-the-go? Download our NEW mobile app today!

funnelcast, the news funnel, real estate news, real estate blogthe news funnel. real estate news, cre, commercial real estate, top real estate news

Share

Search

Featured Companies

Twitter Feed