Austin Commercial Real Estate Recap
October 2011Issue 40

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   Building Relationships,
   One Space at a Time.

In This Issue
Consider More Than Cost When Evaluating Space
Commercial Real Estate Lenders Have a Healthy Appetite for New Business
The Postal Service Has Too Much Extra Space, Report Says
Three Austin Restaurants Close; More on the Way?
Bastrop's Land Values Decimated
wsletter Subtitle Month Yar
Consider More Than Cost When Evaluating Space
By: Washington Realty Group, Inc.
September 2011

There are protections that can be put into leases, like and SDNA clause (subordination, non-disturbance and attornment) but what can be done to better asses the quality of a landlord before you sign a lease?

 

Contact an existing tenant for a reference. It's a simple, common-sense step that could reveal very useful information. Ask both general questions, like how quickly repairs are addressed, and specific, for example, have you had operating expense discrepancies? Hopefully an existing tenant would be happy to share their views while remaining professionally above board.

 

If you have needs to customize your potential space, inquire about the process and contractors the landlord employed. If the space becomes the right choice, knowing how fit-ups are handled is crucial.

 

You can also inquire about the landlord's ownership structure. Is it a professional real estate company in the business of leasing office space or an out-of-town investment group slow to provide approval and feedback on lease issues? Ownership structure can impact everything from initial negotiations to sublease approval. It also correlates directly to the financial stability of the property and the landlord's ability to provide allowances.

 

Find out about other properties within the landlord's portfolio. Have there been newsworthy items about relationships with other tenants? Are the properties all located within similar environments or geographically diverse?

 

Tenants should also review a building's tenant roster to spot patterns in tenancy. This relates a bit more to the draw of the property itself but can help predict how the landlord may react during negotiations. Is the building occupied by a number of law firms on sound financial footing or struggling start-up companies?

 

Other surface level items to consider are security in secluded parts of the building, previous safety issues that have come up and the type of service team in place. The relationships a landlord has also helps you assess their approach to building management.

 

This is an ideal time to secure a long-term office lease in a high quality office property. Therefore, it's that much more crucial to make sure the value you're likely to receive doesn't get offset by the antics of a challenging landlord.

 

Real Estate Lenders Have a Healthy Appetite for New Business

By: Dave Rasmussen and Tony Carlson

9/1/2011 

 

Despite the economic headlines of late, financing for commercial real estate is robust. Insurance companies are near levels that existed before the Great Recession and are lending up to 75 percent of value for multifamily and 65 percent to 70 percent of value for commercial properties. A wide variety of options are available: seven-, 10- and 20-year terms; 20- to 25-year amortizations; and nonrecourse financing for suitable transactions.

 

 

The Postal Service Has Too Much Extra Space, Report Says
By: Ed O'Keefe
9/1/2011 
 
The money-starved U.S. Postal Service operates more than 33,000 facilities and owns or leases millions of square feet it no longer needs, according to a new watchdog estimate. With tens of thousands of post offices, about 500 mail processing facilities and dozens of regional offices, the nation's mail delivery service occupies about 284 million square feet. Of that, about 67 million square feet - representing 24 percent of its real estate - is extra space it doesn't need, according a new report by the Postal Service Inspector General. Postal officials dispute the figure.

 

Read more: http://www.washingtonpost.com/blogs/federal-eye/post/the-postal-service-has-too-much-extra-space-report-says/2011/08/31/gIQAptimsJ_blog.html

Three Austin Restaurants Close; More on the Way?

By: Cody Lyon, Austin Business Journal

9/23/2011

 

They always say that high profiles death's comes in threes. That was the case this week in the Austin restaurant scene.

In one week, three of the city's widely known culinary destinations - The Belmont at 305 W. Sixth St., El Abor at 3411 Glenview Ave. and Hickory Street at 800 Congress Ave. - all shuttered their doors. Could more closures be on the way? A local attorney who works closely with the restaurant industry said yes, and speculated that four others may face the same fate soon.

 

Read more: http://www.bizjournals.com/austin/blog/retail/2011/09/three-austin-restaurants-close-more.html

Bastrop's Land Values Decimated

By: Cody Lyon, Austin Business Journal

9/23/2011

 

Bastrop County land values could be cut in half as the real estate market faces dramatic ups and downs resulting from the wildfires that scorched almost 35,000 acres. Dramatic value dips would be problematic for many landowners, but they could yield opportunities for investors looking to employ a patient buy-hold strategy while this patch of Texas recovers.

 

Read more: http://www.bizjournals.com/austin/print-edition/2011/09/23/bastrops-land-values-decimated.html