Significant write down and sale of the U.S. Bank Tower, an iconic DTLA office property leads me to believe a few things.
🏢 Sluggish leasing activity as a result of the recession and the pandemic is cause for concern to landlords whose rent rolls aren’t showing long term stability.
❓Shadow vacancy, again as a result of the pandemic and recession, could result in a tsunami of new-to-market subleases further hampering velocity in leasing activity.
💰 Overwhelming signs that we’re at the end of the “landlord’s market” cycle mean future lease economics will be more tenant friendly including robust concessions packages.
Although we aren’t currently seeing a direct effect of economic stagnation reflected in leasing rates throughout Southern CA, I am sure 2021 will mark the beginning of a fresh cycle in the office market.
Finding Your First Office Space
Congratulations, business is good and you’re ready to open your first office! Now what? Startup companies that reach the point of needing an office location should examine all of their options before committing to office space. The toughest part of choosing that first office is knowing what criteria to base your decision on. Keep in mind that real estate costs are typically the second or third greatest expense on a company balance sheet, and many companies stay the red because they carry more facility related overhead than necessary.