Industrial Insights23 Aug 2024

Understanding Rental Rates and Market Conditions with Chris Vassilian

In this episode of Industrial Insights, Chris Vasilian discusses tenant representation frequently asked questions. The two main topics covered are the need for office space with a small warehouse component and the decision between lease renewals and relocations. Chris explains the different options for combining office and warehouse space and the considerations for each. He also discusses the factors that influence the decision between renewing a lease or relocating, including cost savings, space optimization, and market conditions. The conversation also touches on topics such as rental rates, free rent concessions, and negotiating operating expenses.

Key Takeaways

When combining office and warehouse space, options include adding a storage component to an office building, leasing flex space with a high office percentage, or leasing pure office space and using an offsite self-storage facility.
The decision between lease renewals and relocations depends on factors such as cost savings, space optimization, and market conditions.
Rent rates have softened in certain cities and size segments, but the extent of the decline varies depending on the location and ownership structure of the building.
Free rent concessions are common in lease negotiations, but the way they are structured can vary. Some leases add the free months to the end of the term, while others adjust the rent schedule to account for the free months.
Operating expenses are typically not included in free rent concessions, but it is possible to negotiate for their abatement as well.

Chapters

00:00Combining Office and Warehouse Space 03:17Lease Renewals vs Relocations 06:21Rental Rates and Market Conditions 08:55The Structure of Free Rent Concessions 13:21Negotiating Operating Expenses

Episode Resources

Connect with Chris Vassilian

https://www.linkedin.com/in/chris-vassilian/
cvassilian@leeirvine.com

Connect with Justin Smith

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