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Nov 5, 2009 5:53 pm US/Central
Commercial Real Estate Glut Has Benefits
(WCCO)
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You only have to look around at any shopping center, strip mall, office building, manufacturing plant or warehouse and it seems almost everywhere there are buildings and parking lots sitting vacant.
CBS
When Jan Strassburg went searching for office space for her new wig business, a shop catering primarily to cancer survivors, the deepening recession brought opportunity. It came in the form of ample vacancies.
"If you drive up and down Excelsior Boulevard, there are 'For Lease' signs everywhere," said Strassburg. "I really did, I had the pick of the crop and I had anxious landlords."
Her shop, "It's Still Me," found a prime location in the Lang Nelson Professional Building along Excelsion Boulevard. Not only is she happy with the 400 square foot corner space, but the leasing price was deeply discounted.
"But just in general, extended terms and better rates and ... it's all out there," Strassburg said.
It's due to the worsening recession now hitting commercial real estate. You only have to look around at any shopping center, strip mall, office building, manufacturing plant or warehouse and it seems almost everywhere there are buildings and parking lots sitting vacant.
As companies downsize their workforce and businesses close, more vacancies are added to the already high inventory of space that is for sale or lease.
"The opportunities are there from the leasing side, no doubt about it," said Brad Bohlman.
Bohlman is senior vice president of Welsh, one of the largest commercial real estate services brokering deals for property owners. He said the large number of vacant properties is forcing landlords to cut better deals -- both to keep the tenants they already have as well as attract new business.
"Things such as half price for a year, the first year of a three-year lease, or a dollar per foot for the first year of a three- to five-year deal. So, these are things I haven't seen in my 24 years I've been in the business," said Bohlman,
It's a tough business climate for property owners and investors, but it's terrific for businesses looking to expand.
"There are pros and cons. It's a tough time to start but it's definitely in our favor as a small business owner working with landlords right now," said Strassburg.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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