Curt Whitesell’s Post

This article sums up what I’ve experienced. My office brokerage was not impacted as much as the headlines would lead you to believe, because 1) We focus on mid-sized businesses who talk about others downsizing, but are not doing it themselves, and 2) leasing volume persists when you focus on tenant rep; it’s much easier to help a tenant figure out their space than fill up a vacant office building 💯 P.S. - also, thank the heavens for industrial real estate 😅🤣 ““Houston office tenants signed 4,022 leases in 2023, slightly above the average 3,786 leases signed 2015 - 2019…. the average size was 13.1% smaller than leases 2015 - 2019… pushed total leasing volume 6.2% lower… local businesses or smaller footprints are less inclined downsize or offer hybrid/remote work…. These trends are occurring throughout the country.”

Still more opportunities coming up for investors, brokers, and contractors! This time it's Seattle, where they are making it feasible to convert office space to residential in the interest of progress. Has your market research person or agency made you ready to pounce on potential property acquisitions and/or made you aware of properties likely to need GCs, and other forms of planning? I'm here to tell you that those that have done their homework to prepare for this announcement, and others like it in other parts of the country, are well ahead of those just now finding out. Staying on top of municipal actions, zoning changes, and real estate trends is what creates plenty of opportunities. While you are working on your current project(s), my office could be helping to cultivate your next one(s). It's a lot more productive than complaining about how "there is no inventory" or you "don't need to spend on market research". If you and your team are ready to pounce on this, my office can also help with modular construction. Avoid weather delays, supply chain issues, and plenty of hours planning instead of leasing. For those who didn't already know about this, here is what's happening in Seattle: https://lnkd.in/eRUZpZqs #Seattle #Washington #KingCounty #Everett #Tacoma #PugetSound #MarketResearch #OfficeConversions #ResidentialConversions #conversions #GeneralContractors #opportunities #RealEstateOpportunities #RealEstate #firstin

Space consolidations and a slowdown in the corporate relocations that historically drove the largest leases continued to characterize the Charlotte office market. That means it's going to take more lease signings to fill the same amount of space than it did prior to 2020. Office tenants signed for 1,200 leases in 2023, which was only about 6% lower than the 1,273 annual average from 2015-2019. However, the average size of those leases shrank to 3,600 SF from 4,800 SF pre-pandemic. That meant total leasing volume fell around 29%. Full article available to CoStar Group subscribers.

"New Leases Totaling 163K SF Added to Melville Office Property" Read the full article below..

How is the commercial office real estate market in Texas doing? “Houston, we have a BIG problem... KBS REIT agreed to sell an office complex in West Houston at a massive 63% discount CCI will acquire 19219 Katy Freeway for $17.6M, or $87 per SF... KBS paid $47M for it in 2016 There's a much bigger problem in Texas... With ~300 empty office buildings, Houston dominates Texas in the 'empty office building rate' in the US w/ 26.3% vacancy Trailing behind it are two Texas cities: Dallas and Austin w/ a vacancy rates of 25.3% and 25.2% repspectively All three cities are facing alarming vacancy rates... Source: TRD, Chron” H/t @triplenetinvest on X https://lnkd.in/gUh-T5vh

More than £900m has been wiped off the value of Canary Wharf Group’s 6.9m sq ft office estate, according to newly filed accounts for the year ended 31 December 2023. The group’s office portfolio has reduced in value from £5.2bn in 2022 to £4.3bn, despite an increase in rental income from £242m to £248m and a marginal drop in occupancy from 92.5% to 91.1%. Occupancy figures for the office estate do not include the 636,600 sq ft 10 Cabot Square, however, which CWG said was not actively being relet. In December last year, CWG took a sublease on the former Barclays HQ so it could reposition it to “meet the increasing demand for high-quality, sustainable office and life sciences uses”. Headline rents across the office estate are £60.76 per sq ft, up from £59.69 per sq ft in 2022. The weighted average unexpired lease term is 11.1 years to expiry and 8.9 years to break – up from 10.6 years and 8.7 years respectively. CWG said it signed 10 office lettings, including renewals, during the year, totalling 94,000 sq ft and generating £5.7m of rent. A further five lettings and renewals totalling 53,000 sq ft were under offer at 31 December 2023 with a potential to secure £3.1m of annual rent. Three were signed after the year end, including its deal to retain Morgan Stanley on the estate. The investment bank has agreed to stay in 547,000 sq ft at 20 Bank Street until 2038. The landlord said that the office leasing market was expected to “present further challenges” over the coming year and that it would continue to be a key focus of risk management. “The group has a strong history of creating value for office tenants,” it said in the report, “and controls for these risks will continue to focus on engaging with current tenants to understand their requirements, diversifying product offerings, while engaging with new sectors, including life sciences, and continuing the development of premium space on the multi-dimensional estate.” Read more ⬇ ⬇ ⬇ https://lnkd.in/dYvXJ68u

Here is a little perspective on office economics. A broker just gave me some numbers for a new suburban building in the Tampa market. Based on rent and expenses, the stabilized value is between $240 to $250/ SF (probably high). TI is $100/SF and leasing commissions are around $10/SF on a 5 year lease. The problem is that $110/ SF is over 3 years worth of rent. And that doesn't include rent loss or profit incentive to do the deal. Compressed stabilized values make office tenanting or re-tenanting a costly problem. https://lnkd.in/eVqKj7ii

"New Leases Added to Back Bay Office Building" Read the full article below..

Office Tuesday Office properties offer stability, particularly due to their professional tenant base and long lease terms. Unlike residential leases, which are typically short-term, commercial office leases often span multiple years, providing steady and predictable income streams. Professional tenants, such as corporate firms, legal practices, and tech companies, tend to be more financially stable and reliable. This reduces the risk of vacancy and ensures consistent occupancy rates. These types of tenants are usually invested in maintaining a high standard of their working environment, contributing to the overall upkeep of the property. This stability is a significant advantage for investors looking for reliable returns in the market. #realestate #business #commercialrealestate #investing #diversify #build #grow #challenge #results #service #professional #modesto #california #ca #stanislauscounty #centralvalley #investor #invest #REI #passiveincome #turlock #sacramento

The U.S. office market is on the brink of a major shift with 150M SF of office leases set to expire in 2025. This wave is a golden opportunity for tenant negotiations, though there are some challenges to consider. Click here to get the full picture: https://bit.ly/3RkSoZs