As office vacancy rates climb, tenant

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“Tenants definitely have the upper handright now,” said Matt a broker for in which specializes in tenant and landlord representation. “With vacancg rates as high as they are, landlords are doing everythinyg they can to entice a tenan t to sign a lease in their Brent Stamm, vice president at in said tenants indeed have more leveragee now, but the amount of advantager depends on the submarket. He note d vacancy rates can vary slightly depending on how the number sare figured. His firm shows a vacancy rate slightlgy lower than the 18 percent overall for the Columbuzs market cited byin Columbus, which represents tenantss exclusively.
“Generally speaking, the Columbus office market has favoredd the tenant for a long Stamm said. “At times, that was due to oversupplu of space onthe market. Today, it feels more like a demands issue. Many tenants have decidedc not to move or expanfd into new space even though theifr businessesare sound. The volatile economic climate has scared many otherwise stronb companies to delay committing to new space until there is greatef stability inthe economy. And he doesn’rt see that changing during 2009.
Still, some landlords are being aggressive in thecurrent climate, offering free rent for a specific period of deals with a low starting base rent with and increases in amenities, such as free said Matthew Minkin, sales and leasing agenyt for in Columbus, which handles landlorsd and tenant representation. Gregory of Ohio Equitiesz said he has seen landlord get more creative in pursuing tenants durin g the past 12 to18 But, there are a few he said, with high occupancy rates who are selective abourt which tenants sign.
“This can sometimes throw tenantds fora loop, since the perception is that landlords are willing to throw everything including the kitchebn sink at them,” he said. And the markert might not be too soft. Over the past five Gregory said, there’s been so much new producyt put into play thatit “ha s inherently driven up vacancy ratez in isolated areas.” One of the most valuablew tools a tenant can have right now is earlu lease renewal, said Gregory Schenk of Schenk Company Inc. If a tenanty has a lease at $18 per square foot and the markett now can bear a reductionto $15, that $3 differenc can translate to thousandz of dollars in savings over a deal’as term.
One company that was able to take advantage of the markey is Alternate Solutions Home Careof Dayton. Davix Ganzsarto, CEO of the 10-year-old company that works with the expanded into Cincinnati five years ago and then wanted to move to He had his eye on spacein Dublin. Last September, he startexd looking, enlisting the help of and “was shocked” at how much spacr was there. He ended up in negotiationsd with Duke Realty for space in the Atrium Building in Dublijn onRings Road. The office had a shared conferenc e room and fitness facility that appealesto Ganzsarto.
But what sealed the deal was Duke’s willingnessa to do an extensiv ebuild out, gutting the inside, putting in carpet, paint and building a kitchen and creatin g a temperature controlled room for the computer The company ended up getting the 5,000 square feet it wanted with the builrd out at what Ganzsarto called a “verg attractive” rate. In addition, the landlordx leased him temporary space right next door to the new headquarterse as it was beinfgworked on. “In a different economicx timeswe wouldn’t have been able to get that smallp a space in such a large he said.
SpaceJunk Media, a motion graphics and videpo production companyin Clintonville, found it was outgrowing the placse it called home the past 10 The rent at the Indianola Avenuw location was reasonable, said Mike co-owner, and the building was fairlyt easy to get to, but growtgh was outpacing the space. A contracyt to buy the building fell throughin 2008. “We wantes to be centrally located, joining many of our clients in supportin thedowntown community,” Blosel said. “We are positioned as a high end, stylis brand in our industry and wanted to make sure our officreflected that. Tall ceilings, windows and a lot of charactert is what we werelooking for.
We also wantedr a place that our client s are excited tocome to.” Working with Gregory at Ohio SpaceJunk found a space on North Third Streeft downtown. “The timing was good – we were able to negotiatw many things inthe contract,” Blosel said. “The landlord definitely worked withus ... becausd there weren’t people lining up for downtown property at the time wewere