Tenants hold all the cards in commercial real estate market
It’s a tenant’s market out there, which means more landlords are offering sweet deals and incentives such as lower rents, built-out spaces or shorter lease terms — anything to attract and retain quality lessees.
“Based on the offers we’ve received the tenants definitely know that it’s a tenant market. There’s no such thing as an insulting offer,” said Grant Harris, an industrial broker with Lee & Associates-L.A. North/Ventura. Some landlords are still in shock, he said, but many are finally deciding to come off the sidelines and become participants in the new marketplace, even if it means making some hefty concessions.
The 98,952-square-foot-square-foot Camarillo industrial lease to muscle car parts manufacturer Dynacorn in July was one such restructured lease. Property owner Triliad Development is debt-free and therefore notorious for being inflexible with tenants. “But they were finding that with the next 12 months they were going to have more inventory than what they typically would have,” Harris, the broker for Triliad, said.