BiggerPockets

How to Successfully Divide and Rent your Office Space

Monday, April 19

If you find yourself stuck in a long-term lease and paying on much more office space than you need, you may want to consider renting your unused space and earning a little extra money each month.
It is not uncommon to find tenants who have rented Dallas office space that no longer meets their needs and their budget. In particular, many tenants have experienced a decline in business, which therefore means that the office space that fit them just a couple years ago is now too big – and too expensive – for them.
Because of these challenges, many tenants are dividing up their office space and renting out the unused space. Renting out unused Dallas office space is a great way to create additional revenue, thereby allowing many tenants to make it through difficult financial times.
If your rent is bogging you down and you are actively looking for another source of revenue, you may want to consider whether dividing up your current space and renting it out is an option. You may also want to rethink your current office situation and ask yourself questions like: Do I really need all of the space that I am renting? How can I consolidate some of my office space to accommodate a tenant? If I can’t give up any office space, do I have enough space to rent out as storage space?
Get creative and start imagining your Dallas office space in a whole new light!

 

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<!--[if !supportLists]-->1.      <!--[endif]-->The first thing you must do is investigate the terms and conditions of your lease, as well as the existing building structure and ordinances and zoning laws, to be sure that your plans are feasible.

<!--[if !supportLists]-->2.      <!--[endif]-->Consider redesigning your office space to accommodate more than one business. You may be able to divide your current office space into more than one office, which may fetch you more rent money than renting out a single space. You may need to construct a partition or wall, as well as windows and a door. In addition, you may also want to consider soundproofing and additional air conditioning or heating units.

<!--[if !supportLists]-->3.      <!--[endif]-->When redesigning your office space, pay close attention to windows and air vents, as ideally you will want to divide up these things fairly as to make your new office space desirable to renters.

<!--[if !supportLists]-->4.      <!--[endif]-->Don’t forget the details. You will want to include the cost of painting and decorating in your budget, as renters will want to see things like nicely painted walls and ceiling fans.

<!--[if !supportLists]-->5.      <!--[endif]-->Consider the type of businesses that will be renting out your space and design your space accordingly.

<!--[if !supportLists]-->6.      <!--[endif]-->Don’t forget to ask for help from professionals, such as architects and contractors, as they will be able to give you a good idea of what you can and cannot do with your San Antonio office space.

 

How to Successfully Divide and Rent your Office Space

Monday, April 19

If you find yourself stuck in a long-term lease and paying on much more office space than you need, you may want to consider renting your unused space and earning a little extra money each month.
It is not uncommon to find tenants who have rented Dallas office space that no longer meets their needs and their budget. In particular, many tenants have experienced a decline in business, which therefore means that the office space that fit them just a couple years ago is now too big – and too expensive – for them.
Because of these challenges, many tenants are dividing up their office space and renting out the unused space. Renting out unused Dallas office space is a great way to create additional revenue, thereby allowing many tenants to make it through difficult financial times.
If your rent is bogging you down and you are actively looking for another source of revenue, you may want to consider whether dividing up your current space and renting it out is an option. You may also want to rethink your current office situation and ask yourself questions like: Do I really need all of the space that I am renting? How can I consolidate some of my office space to accommodate a tenant? If I can’t give up any office space, do I have enough space to rent out as storage space?
Get creative and start imagining your Dallas office space in a whole new light!

 

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<!--[if !supportLists]-->1.      <!--[endif]-->The first thing you must do is investigate the terms and conditions of your lease, as well as the existing building structure and ordinances and zoning laws, to be sure that your plans are feasible.

<!--[if !supportLists]-->2.      <!--[endif]-->Consider redesigning your office space to accommodate more than one business. You may be able to divide your current office space into more than one office, which may fetch you more rent money than renting out a single space. You may need to construct a partition or wall, as well as windows and a door. In addition, you may also want to consider soundproofing and additional air conditioning or heating units.

<!--[if !supportLists]-->3.      <!--[endif]-->When redesigning your office space, pay close attention to windows and air vents, as ideally you will want to divide up these things fairly as to make your new office space desirable to renters.

<!--[if !supportLists]-->4.      <!--[endif]-->Don’t forget the details. You will want to include the cost of painting and decorating in your budget, as renters will want to see things like nicely painted walls and ceiling fans.

<!--[if !supportLists]-->5.      <!--[endif]-->Consider the type of businesses that will be renting out your space and design your space accordingly.

<!--[if !supportLists]-->6.      <!--[endif]-->Don’t forget to ask for help from professionals, such as architects and contractors, as they will be able to give you a good idea of what you can and cannot do with your San Antonio office space.

 

How to Successfully Divide and Rent your Office Space

Monday, April 19

If you find yourself stuck in a long-term lease and paying on much more office space than you need, you may want to consider renting your unused space and earning a little extra money each month.
It is not uncommon to find tenants who have rented Dallas office space that no longer meets their needs and their budget. In particular, many tenants have experienced a decline in business, which therefore means that the office space that fit them just a couple years ago is now too big – and too expensive – for them.
Because of these challenges, many tenants are dividing up their office space and renting out the unused space. Renting out unused Dallas office space is a great way to create additional revenue, thereby allowing many tenants to make it through difficult financial times.
If your rent is bogging you down and you are actively looking for another source of revenue, you may want to consider whether dividing up your current space and renting it out is an option. You may also want to rethink your current office situation and ask yourself questions like: Do I really need all of the space that I am renting? How can I consolidate some of my office space to accommodate a tenant? If I can’t give up any office space, do I have enough space to rent out as storage space?
Get creative and start imagining your Dallas office space in a whole new light!

1.      The first thing you must do is investigate the terms and conditions of your lease, as well as the existing building structure and ordinances and zoning laws, to be sure that your plans are feasible.

2.      Consider redesigning your office space to accommodate more than one business. You may be able to divide your current office space into more than one office, which may fetch you more rent money than renting out a single space. You may need to construct a partition or wall, as well as windows and a door. In addition, you may also want to consider soundproofing and additional air conditioning or heating units.

3.      When redesigning your office space, pay close attention to windows and air vents, as ideally you will want to divide up these things fairly as to make your new office space desirable to renters.

4.      Don’t forget the details. You will want to include the cost of painting and decorating in your budget, as renters will want to see things like nicely painted walls and ceiling fans.

5.      Consider the type of businesses that will be renting out your space and design your space accordingly.

6.      Don’t forget to ask for help from professionals, such as architects and contractors, as they will be able to give you a good idea of what you can and cannot do with your San Antonio office space

Dallas office space market

Friday, December 04

Tenant demand for Dallas office space and industrial space in North Texas will remain sluggish. According to preliminary third-quarter research rent will remain flat for the rest of this year and into 2010.

Demand for Downtown Dallas Commercial Real Estate dropped 43% through September when compared to 2008. Only 7.16 million square feet leased year-to-date, compared to 12.6 million square feet leased last year at this time.The overall office vacancy rate stands at 21.9 percent, up from 20.7 percent in September 2008. The vacancy rate for the Dallas Central Business District is approaching 30%, jumping from 26.5 percent a year ago to its current 29.1 percent. The downtown vacancy rate hasn't been this high since the third-quarter of 2005, when it hit 29.8 percent.
 Job creation is the key to turning around the high vacancy rate downtown and marketwide.
Asking rental rates across classes reached $20.77 per square foot, up 2.2 percent over third-quarter 2008 levels. Rates saw a jump in the last quarter of 2008, with the delivery of new class A construction completions in the Preston Center, Turtle Creek/Uptown and Legacy/Frisco office space. Landlords of class A product are quoting average rents of $26.29 per square foot, an increase of 3.9% over the same period last year.Even though quoted rates are up, effective rates are actually falling when concessions such as free rent are factored in, Heidelbaugh said. He estimated that effective rents have fallen anywhere from $1 to $5 per square foot, depending on the submarket and quality of the building.
On the industrial side, overall vacancy increased to 12.4 percent from 10.1 percent a year ago. The rise was attributed to construction completions, which totaled 7.6 million square feet through September 2009, a decrease of 47.5 percent over 2008.

The Dallas Office Market: Where Do We Go from Here?

Monday, November 30

Here's a bit of somber news: the hardest hit metro area, in terms of the office real estate market, is Dallas-Fort Worth. In fact, Dallas has seen many companies either delaying plans to expand or build over the last year.

To give you an idea as to the gravity of the Dallas office real estate market, consider this statistic: new leases fell by nearly 60 percent over the first six months of 2009 alone. This, of course, then snowballed into increased vacancies and nearly no activity on the construction front.

New - and much stricter -underwriting standards have left many would-be buyers of office buildings on the sidelines. This, for many buyers, is more than unwelcoming news, as sales prices are very competitive.

However, sales prices for office space have remained fairly strong, given that sales prices for office buildings didn't go through the roof during the height of the real estate market like they did in other coastal markets.

What Does the Rest of 2009 Hold?

The rest of 2009, unfortunately, looks relatively grim in terms of new leases on Downtown Dallas office space. Many industry professionals expect the vacancy rate in the Dallas-Fort Worth metro area to fall another 2.9 percent by year's end, thereby producing an overall vacancy rate of 24.1 percent.

The rents for office space are also expected to drop nearly 6 percent as a result, thereby leaving the average price per square foot at around $15.56.

However, construction isn't at a total standstill, as the area is expected to acquire about 2.1 million square feet of new construction by the end of the year.

Why the Continued Decline in the Office Market?

With the drop in office building prices, as well as the overall decline in office vacancies, the question remains: why has the Dallas-Fort Worth market been hit so hard?

For example, the office building prices, according to PricewaterhouseCoopers, are expected to drop 17 percent over the next 12 months.  This is much higher than the national average drop of 11 to 12 percent.

The bottom line, according to most investors, is that the Dallas-Fort Worth area has seen some of the largest corporate cutbacks in America. Other factors include global downsizing and increased international competition, particularly in the high-tech industry.

Commercial mortgage defaults and distressed property sales have also contributed to the struggling office market industry.

It is important to remember amidst all of the depressing news, is that the Dallas-Fort Worth metro area still boasts excellent job growth and industry growth, which will continue to bring investors back, time and time again.

The sales market in the office industry is, at the present time, simply in a state of flux because both buyers and sellers are confused as to where the market is headed. And, as everyone knows all too well, indecision is not a good sign in an already-struggling market.

The PricewaterhouseCoopers' forecast, however, sees signs of recovery in both the national and local retail and office markets in 2011.

Aloft Hotel is out to Fight the Hotel Industry Odds

Monday, October 19

Dallas-area hotels have been experiencing difficult times.  In response to the struggling commercial real estate market, many hotels have seen a decrease in demand and occupancy, thereby driving down room rates and overall revenue.

PKF Hospitality Research, Smith Travel Research and Moody’s Economy.com recently released a report entitled “Hotel Horizons,” which detailed the performance of the hotel industry over the last year. 

Demand for hotel rooms in the Dallas area was down nearly 11 percent during the first six months of 2009, and occupancy was down 12.4 percent. In addition, the room rate for Dallas-area hotels was down nearly eight percent for that same period.

The report goes on to forecast a 7.5 percent total drop in demand for 2009, and an 8.7 percent decline in room rates for the same period.   The occupancy rate for Dallas-area hotels for 2009 is expected to be around 53 percent, which is 11 percent lower than 2008.

This somber forecast for the hotel industry has left many analysts scratching their heads, as this kind of decline in demand has not been seen since the 1980s

Even with the grim news on the hotel real estate front, the newest addition to Dallas’ hotel market recently opened to much excitement.  The beautiful new Aloft Hotel, which is situated across from the future Dallas Convention Center, is out to defy the odds with its reasonable rates and prime location. The developers of the Aloft Hotel are also betting that once the $350 million downtown convention center opens in 2012, business will be even stronger.

The Aloft Hotel, which once served as a railroad freight depot nearly 84 years ago, now shines brightly again as a beacon in the downtown Dallas area.  The hotel boasts 193 rooms and had a construction cost of $35 million, which the developers of Dallas’ newest hotel feel is quite a bargain, considering the business that this hotel is expected to generate in the upcoming years.

The reasonably priced rooms, which start out as low as $89 per night, are thought to gain attention and attract business, and that’s what developer Ted Hamilton is counting on.

From the historic design of the building, to the beautiful interiors and impressive amenities, the Aloft Hotel is out to defy the current odds associated with a struggling hotel industry in Dallas. Some of the amenities found at the Aloft Hotel include a bar, a fitness center, 10,000 square feet of meeting space and a swimming pool.

Developers of the Aloft Hotel expect it to attract conventioneers, which should make up about 40 percent of its business.

If first impressions are any indication, then the Aloft Hotel has a bright future. In fact, during its first weekend, it was nearly booked full.

There has to come a time when the commercial real estate market, including the hotel industry, is ready to turn around and start rebuilding. And perhaps the Aloft Hotel is the catalyst that the Dallas area needs!

Dallas-area hotels have been experiencing difficult times.  In response to the struggling commercial real estate market, many hotels have seen a decrease in demand and occupancy, thereby driving down room rates and overall revenue.

PKF Hospitality Research, Smith Travel Research and Moody’s Economy.com recently released a report entitled “Hotel Horizons,” which detailed the performance of the hotel industry over the last year. 

Demand for hotel rooms in the Dallas area was down nearly 11 percent during the first six months of 2009, and occupancy was down 12.4 percent. In addition, the room rate for Dallas-area hotels was down nearly eight percent for that same period.

The report goes on to forecast a 7.5 percent total drop in demand for 2009, and an 8.7 percent decline in room rates for the same period.   The occupancy rate for Dallas-area hotels for 2009 is expected to be around 53 percent, which is 11 percent lower than 2008.

This somber forecast for the hotel industry has left many analysts scratching their heads, as this kind of decline in demand has not been seen since the 1980s

Even with the grim news on the hotel real estate front, the newest addition to Dallas’ hotel market recently opened to much excitement.  The beautiful new Aloft Hotel, which is situated across from the future Dallas Convention Center, is out to defy the odds with its reasonable rates and prime location. The developers of the Aloft Hotel are also betting that once the $350 million downtown convention center opens in 2012, business will be even stronger.

The Aloft Hotel, which once served as a railroad freight depot nearly 84 years ago, now shines brightly again as a beacon in the downtown Dallas area.  The hotel boasts 193 rooms and had a construction cost of $35 million, which the developers of Dallas’ newest hotel feel is quite a bargain, considering the business that this hotel is expected to generate in the upcoming years.

The reasonably priced rooms, which start out as low as $89 per night, are thought to gain attention and attract business, and that’s what developer Ted Hamilton is counting on.

From the historic design of the building, to the beautiful interiors and impressive amenities, the Aloft Hotel is out to defy the current odds associated with a struggling hotel industry in Dallas. Some of the amenities found at the Aloft Hotel include a bar, a fitness center, 10,000 square feet of meeting space and a swimming pool.

Developers of the Aloft Hotel expect it to attract conventioneers, which should make up about 40 percent of its business.

If first impressions are any indication, then the Aloft Hotel has a bright future. In fact, during its first weekend, it was nearly booked full.

There has to come a time when the commercial real estate market, including the hotel industry, is ready to turn around and start rebuilding. And perhaps the Aloft Hotel is the catalyst that the Dallas area needs!

Posted by Peter Winters

Peter specializes in Dallas office space, Downtown Dallas commercial real estate, and Fort Worth office space