AzOfficeSpace.Com

		2008  
	

Reasons why the price should be lower:

Office vacancy rates in some Phoenix area submarkets will approach 20% in the next few months.
There are many projects still under construction, with few signed tenants.
Mortgage, real estate, and related financial companies have shrunk, and this has made a lot of sub-lease space available.
Individual Office condo owners that bought i.e. 5,000 sqft, and only using 2,500 sqft for themselves, have a 50% vacancy factor. Many office condo owners lack the money to complete the interior of their buildings.
With commissions and remodel costs, it costs a Landlord at least 8% of the lease value to replace a current paying tenant.
Newer buildings tend to have larger blocks of space to fill than older buildings. Knowing when a space can be divided can spur big savings.
The value of premium locations decrease as budgets tighten.  Efficiency and price grow in importance to tenants. Look for properties on the "edge" of markets to feel greater pressure.
Tenants should gauge the vacancy in their current building.  Look for increasing vacancy as an opportunity to renegotiate even a long standing deal.
Landlords tend to be slower to recognize area changes and demand/supply factors until their rent checks slow down and their building drops below 80% occupancy. Knowing a buildings current status can help negotiations greatly.
There is a difference between having tenants and having paying tenants, particularly when it comes to operating costs.
Historically, election years are periods of uncertainty.  This is true again.
Knowing what other property is available and the momentum of the market will give a strong negotiating advantage.

METRO PHOENIX COMMERCIAL OFFICE SPACE PROFILE

• First quarter 2008 vacancy, inclusive of all office buildings is near 14%. It is moving up quickly. Data bases calculations show NEGATIVE absorption for the first time in years.
• 1.5 million square feet of new office space has come on-line, and more is being built.  This is raising the vacancy rate north of 14%.  Warning signs for owners/developers ???? The slowdown in residential real estate is reaching the commercial areas.  Real estate related businesses will continue to shed employees, which yields to more vacancy.
• The existing size of the combined market is over 134 million square feet  
• The highest vacancy rates are in the Northwest and west portion of the valley, but stress is occurring in North Scottsdale too.

• The Greater Phoenix average rent rate is statistically hovering near $23 per foot per year, based on a full service lease. Many deals are being done below that price now!!!
  
   

Call the Buyer & Tenant Agent, Jeff Jennings, for more details
on getting a lower price at 602-265-4600

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