From The Desk Of Ken Silberling - Part 2

Office Market Review Part 2
"Opportunity knocks but be careful of who's behind the door."
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In Part 1, I discussed how the office market has found a bottom and that rental rates and occupancy rates are now headed upward for the first time in two years. In Part 2, we'll explore the benefits and the pitfalls for tenants in today's market.

Ken Silberling has been Danburg Management's Vice President of Leasing and Acquisitions since 1999. Prior to that he was among the most widely quoted analysts of the South Florida Commercial Real Estate Market.

At the moment, we remain in a strong tenant's market. As a Landlord's representative, I am seeing rental rates at a 25 to 30 percent discount off the highs of two to three years ago. But those rates, which had been in a freefall, have begun to stabilize. Still, some owners remain desperate to attract new leases.

My recommendation for tenants is to take advantage of today's low rates and try to lock them in long term. I personally will consider shorter term leases in anticipation of future increases in market rents. But a word of warning. What may look like a good deal from a desperate owner of a distressed building could become problematic if that owner is unable to provide essential services. For example, what happens if an owner lacks the funding to repair a building's air conditioning system? And what happens to your corporate image if your landlord cuts corners on property upkeep and landscaping?

For landlords and tenants alike, credit is the key. As landlords, we are looking for tenants with whom we can develop long term relationships. We are willing to give great deals and expend funds on tenant improvements as long as we know that we will collect a fair market rent over the term of the lease. But tenants need to be careful that they are entering a relationship with a landlord that can provide the services and working environment necessary to keep their business successful.

"If you are the owner of a successful business, it's great time to take stock of your current and future space needs."

Palm Beach County Vacancy Rates If you are the owner of a successful business, it's great time to take stock of your current and future space needs. For tenants who foresee the need to expand, there is the opportunity to take on more space at a reduced rent. For those who will need less space, there is an opportunity to exchange current rent for future lease term, thereby reducing expenses.

At Danburg Management, we specialize in delivering top quality smaller office spaces from 350 to 7,000 square feet. We've also instituted our tenant connections program, where our tenants can share business opportunities to their mutual benefit.

Our company has been active in the South Florida market for 27 years and I've personally been active in the market for 25 years. Feel free to give me a call, drop me an e-mail or comment on our blog. For many companies, our properties can provide the solution they are looking for. If not, we'd be happy to discuss your specific needs and point you in the right direction.

Thanks for your interest,

Ken Silberling
Vice President, Acquisitions & Leasing
7700 Congress Avenue Suite 3100
Boca Raton, FL 33487
T (561) 997-9577 F (561) 997-9577
E-Mail: Ken@Danburg.com
Website: www.danburg.com