Tag Archives: plano

US Office Vacancy Lowest in 10 Years

Post By : admin 23 March 2018 Leave a comment

According to a report produced by Transwestern, office vacancies in the US as a whole are at their lowest in 10 years. That’s pretty amazing when you consider that they also report that 70.7 million square feet (SF) of new construction has been started during that same period. But office demand follows job creation so with unemployment at 4.1%, the lowest since late 2000, this makes sense.

The top 10 markets for net absorption (the net change in the total SF of office space occupied) were lead by Dallas/Fort Worth with over 5 million SF absorbed, followed by San Jose/Silicon Valley with about half that, then Settle, Northern Virginia, Austin, Phoenix, Detroit, Las Vegas, St. Louis and Baltimore.

Notwithstanding the top absorption markets, the top 10 markets for rent growth looked different: Boston at 15%, followed by San Francisco, Charlotte, Orlando, Raleigh/Durham, Oklahoma City, East Bay/Oakland, Phoenix, Los Angeles and Portland. Some of those intuitively make sense because they are land-constrained cities with a huge tech presence. Others were a surprise.

The cities with the most new space under construction are New York with over 16 million SF underway, Dallas/Fort Worth with over 8 million SF coming, Washington, DC at 7.6 million SF, San Francisco at 6 million SF, and Denver at 5 million SF.

The future looks bright for the national office market so long as jobs hold up. If there is a downturn in the economy and companies stop hiring and start laying workers off, things will change.

For the rest of the report, click here.

Bob Gibbons is a Real Estate Advisor & Tenant Advocate (also known as a tenant rep) with REATA Commercial Realty, Inc. which is a tenant advisory firm based in Plano, Texas. Bob serves companies in Plano, Frisco, McKinney, Allen, Richardson, Addison, Dallas and the surrounding areas and specializes in companies which lease or buy office and warehouse properties.

Categories: Uncategorized

WeWork – Will it Work in a Downturn?

Post By : admin 22 February 2018 Leave a comment

The New York Times just published a feature on WeWork called The WeWork Manifesto: First, Office Space. Next, the World. It’s a very interesting article about how WeWork has gone from start-up idea to a market valuation of $20 billion in only 8 years.

It’s a very interesting article and I really have to give credit to the co-founders for creating something that appears to be working so well. It’s good for companies to have options. WeWork is one of many providers of co-working space. It’s hip, cool and very open space. There are some real benefits to it – chief among them being flexibility since tenants don’t have to lock into long-term leases.

Co-working providers claim to save companies a huge amount of money while providing flexibility and the kind of space that younger employees want. This is true, but you have to remember that if you rent a dedicated desk in a co-working location, each person typically gets a 4-foot-wide table with another table immediately next to it for another person. So a typical 10-foot-by-12-foot office that you would give a staffer in a traditional office build-out, would likely have 4 people in it at a co-working office. While prices vary by location, those 4-foot tables go for $500 a month. So that one office costs $2,000 a month. It’s easy to see how co-working providers can afford to offer free beer and other amenities.

WeWork has been in business for 8 years now – all of which have been in an expanding economy. It will be interesting to see what happens when the economy takes a dip. I hope they do well, but I’m dubious. Practically every executive suite operator went under in the recession of the late 80’s and early 90’s and landlords ended up taking back the empty spaces left over. Since WeWork members are on month-to-month contracts, they can move out quickly if they start feeling the effects of a downturn and are trying to reduce cost. Thus, WeWork and other co-working providers will lose revenue much faster than building landlords whose tenants are committed to multi-year leases. That will put a major strain on their ability to stay in business, much less grow.

So while a recession may result in tough times for the operators of co-working locations and executive suites as well (think Regus), they remain a great option for tenants who need short-term space for projects or when testing the water in a new market.

Bob Gibbons is a Real Estate Advisor & Tenant Advocate (also known as a tenant rep) with REATA Commercial Realty, Inc. which is a tenant advisory firm based in Plano, Texas. Bob serves companies in Plano, Frisco, McKinney, Allen, Richardson, Addison, Dallas and the surrounding areas and specializes in companies which lease or buy office and warehouse properties.

Categories: Uncategorized

A Ban on Dual Agency Fails…For Now

Post By : admin 16 January 2018 Leave a comment

As you probably know, at REATA, we only represent users – companies that lease or buy office and warehouse space. We won’t take landlord listings for lease because it has the potential to create conflicts of interest.

Furthermore, we don’t think that real estate companies should be allowed to represent both sides of a transaction. That would mean that one agent in BrokerageCo (made up name) shouldn’t be allowed to represent the landlord or seller while another agent in the same BrokerageCo represents the tenant or buyer.

Fortunately, some powerful forces in the industry are starting to agree with us and take action to make this mandatory.

California Assembly Bill 1059 is legislation that was crafted to end “dual agency” (it’s called “intermediary” in Texas). While the specific provision ending this practice was removed from the bill before it made it to committee, the good news is that it was considered at all. It has to be discussed a few times before it actually becomes law.

This all began in 2007 when a Hong Kong businessman sued Coldwell Banker and its agents. He had been represented by a Coldwell Banker agent as had the seller. When a giant discrepancy was found in the size of the property he purchased (long after closing), he filed suit. It went all the way to the California Supreme Court which determined that Coldwell Banker failed in its fiduciary responsibility to him. That was a lightning bolt decision.

The United Kingdom is ahead of the USA on this issue. The Royal Institution of Chartered Surveyors (think of them as the UK version of the National Association of Realtors) in early 2017 created a policy statement with strict conflict-of-interest requirements which specifically bans the practice in the UK.

So the government and industry groups appear to be moving in the right direction. It will likely take several more years, but we’re hopeful that all concerned will do the right thing for clients whether legislation requires it or not.

A more-comprehensive article is available here if you want to learn more.

Bob Gibbons is a Real Estate Advisor & Tenant Advocate with REATA Commercial Realty, Inc. which is a tenant advisory firm based in Plano, Texas. Bob serves companies in Plano, Frisco, McKinney, Allen, Richardson, Addison, Dallas and the surrounding areas and specializes in companies which lease or buy office and warehouse properties.

Categories: Uncategorized