Last week, we posted about options for avoiding long-term leases including subleasing a Houston office rental, which is a very relevant topic both locally and nationwide. Subleasing was mentioned as a viable option for lease term flexibility and I wanted to expand on that topic a bit more.
After discussing our vision with someone who has had a painful experience looking for commercial space in Houston, the apt analogy was -
As usual (we don't have fun lives...), I was looking through all the Houston commercial space options. This time, I was trying to find the best way to find a tenant broker in Houston. In turns out this is as difficult as finding commercial space.
After reading this except from a recent BestVendor Blog post, I thought about the short term lease options in Houston -
In 1994, the Americans with Disabilities Act was passed to prevent discrimination of the disabled in employment, government services, transportation, public accommodations, and telecommunications. ADA requires all business and public facilities to be accessible by the handicapped, which meant that at the time of the act, existing physical barriers had to be moved all over and policies and standards had to be changed.
In anticipation of our team heading to Austin next week to start development, I figured it was appropriate to inaugurate the Austin section of our website. Only minor problem...I couldn't figure out how to add an "Austin Blog" tab to the top part of the site and subsequently post there. I guess it's a good thing we are calling in the big guns.
In real estate leasing terms, the Right of First Refusal (ROFR) is a legal option of a tenant to rent property before another party can. This option is appealing to businesses who are planning ahead for future expansion and want the option to secure additional specified space if and when an outside party shows interest in said space. Landlords will offer this kind of option to prospective (or current) tenants to promote growth of a business within their property.
The city of Houston sure had a good beginning to 2011. Fast Company Magazine named Houston its 2011 City of the Year, which could help the city recruit new businesses and cause a spike in leasing activity. The NCAA Final Four was held at Reliant Stadium, which gave us two great semi-final games (the Final, not so much). And, according to Jones Lang LaSalle's Houston Office Leasing Highlights Q1 report, economic conditions are improving and we're in much better shape than a year ago.
An entrepreneur and real estate professional compare notes on Loopnet's asking price trends for commercial real estate in Houston, Texas:
Written By: a Houston based associate of an international law firm representing clients in a broad range of developments, financings, dispositions and acquisitions of a variety of commercial projects, including the sale, acquisition, leasing, financing and development of mixed-use, office, retail, industrial and energy facilities.
While the talking heads on CNBC and Bloomberg keep flapping their lips about if the recession is over or if the recovery has begun or “maybe something really cool that I don't even know about,” here in Houston we are starting to see signs pointing to a brighter future. Fresh on the heels of Hines’ completion of BG Group Place they are already preliminary discussions for another downtown office building. As this article points out, we will soon be seeing the first new office building in the Galleria area break ground over the summer.
In the midst of exploring all of the different varieties of office work space becoming more readily available in the U.S., I thought this article on individual work areas significantly shrinking over the past 10-15 years was interesting.
Through the magic of twitter, I recently came across a different type of commercial real estate blog, Model For Success by REFM. The REFM blog covers all of real estate financial modeling including Excel tips and tricks, financial modeling education, market insights and career advice. As a CPA and finance major, I find the insights particularly interesting.
After reading a very informative post on CRE outsider about the future of CRE data, I began to think about an often-debated question among my friends (we are geeks, what can I say). This question revolves around if Houston commercial office space (or anywhere for that matter) is just another commodity (like wheat, coffee, airline tickets, etc.) or if this definition oversimplifies the Houston commercial real estate business. A commodity is defined by Webster’s as “a good or service whose wide availability typically leads to smaller profit margins and diminishes the importance of factors other than price “.
In order of importance….Happy Mother’s Day to all the moms out there!
Tenant Improvement Allowance or credit, is the negotiated sum a landlord is willing to spend to customize the space needs of a particular tenant. Typically found in the Leasehold Improvements or concessions section of a commercial lease, this type of negotiation is often stated in dollars per square feet and is present in standard office leases for commercial real estate in Houston.
The concept of sharing office space, either through Houston Coworking or co-spacing is gaining traction almost daily. Fast Company just published an article touting the benefits of working in these environments. Examples abound in both San Francisco and New York Coworking and this decade old idea is quickly maturing into more advanced concepts. It is amazing this idea is already evolving before the first iteration has made it to Houston!
I grabbed coffee earlier with Joe Stampone of A Student of the Real Estate Game. He knows his stuff and the blog that he has been writing for more than two years is a first rate resource to learn more about Real Estate as an industry. While it won’t help you find that perfect space TheSquareFoot, it is one of the best destinations for actual industry knowledge around. Also, for those of you looking to get into real estate as a profession, he has plenty of invaluable advice.
The term Base Year pertains to tenant property expenses in commercial buildings for lease. Having a base year lease agreement is essentially the combination of a Triple Net Lease, where the tenants are responsible for the property's real estate taxes, insurance, maintenance, repairs, utilities and other items and a Gross Lease, where the property landlord handles those expenses. A landlord likes base year agreements because they act as a safety net, should the property's expenses significantly increase over the course of a given tenant's lease term. In general, a base year is calculated on a calendar year basis or the first 12 months of a tenant's occupancy.
Many solo practitioners and entrepreneurs in Houston begin to think about their space options once business starts to take off and they realize that working from home might not be the best option. I decided to do some research on the best way to find Woodlands executive suites on the web and the findings surprised me.
The recession’s hit to Houston retail space has been well documented. In this recent article in the Wall Street Journal, several stats from a survey by Colliers International covering the closures of four prominent big-box retailers over the last couple of years are particularly sobering. Just over half of the surveyed properties are still vacant and the rest of them were re-leased for rents that averages almost 20% less than what the previous tenants were paying. As the article points out, the recent bankruptcies of Blockbuster and Borders will only add to the problems. One positive note is that none of the seven borders locations in Houston were on the initial chopping block so it appears that Houston retail space is holding up better than other national markets.
In light of the gargantuan announcement of CoStar’s acquisition of LoopNet for some $800 million, I thought it would be fitting to take a close look at why the two heaviest hitters in the online commercial real estate world became one.
It seems like every other day I see an ad for an executive suite or virtual office in Houston. I thought I would do a little research as to the differences between them and I learned how they are ultimately becoming the same thing. In the past five years, the virtual office has become one of the favorite words of executive suite landlords in Houston.
This morning I came across this fantastic article about commercial lease clauses Open Letter to Tenants : 19 Lease Secrets Straight From A Broker. from Duke Long, a very knowledgeable commercial real estate blogger, and it really hit home with one of the biggest red flags in commercial leasing: the electrical clause in every lease agreement of a Houston office rental.
As a commercial real estate professional, I am always looking for the best resources to help me market Houston commercial real estate. I have worked in several cities around the country and one of the better resources is REDnews (which stands for Real Estate Directory News). Plus, they specialize in my favorite state...Texas.
I was just in New York City for a friend's wedding and used the opportunity to meet with and talk to other early stage companies about their experience with finding office space. New York commercial real estate is clearly a whole different beast, but the general concerns are the same. They were looking for open, collaborative spaces at a decent price, however, they did not want to lock themselves into a space too big or small as things can change very radically and quickly. These companies were funded, had multiple employees, and had a dedicated server / computer equipment (I guess sometimes, a laptop isn’t enough). Thus [co-working in NYC] (http://www.thesquarefoot.com/New-York-City/Coworking-in-New-York] was not an ideal option. They wanted some form of dedicated space.
Being a successful entrepreneur is a desire of many hard working individuals. Though being an entrepreneur is a great way to take control of your work and life, it poses a few challenges when it comes to balancing the difference between work and home life, especially for those working out of their homes. It got me thinking, what office space options for entrepreneurs are out there for those who do not have a lot of cash, but also don't want to be holed up in their house all day everyday?
The internet's newest Houston commercial property website is holding a logo design contest on 99designs.com for it's new logo. We have 8 fantastic finalists and we need your input to make sure TheSquareFoot has the best looking logo on the internet.
After reading the post on the principles in choosing office space, I started thinking about how relevant each of these principles were to me with regards to choosing Houston commercial property for lease. I would rank these principles in the following order -
For start-up companies or existing businesses that are in need of cost cutting, subleasing Housotn office space may make more sense than signing a standard office lease with the landlord of a commercial property in Houston.