Greetings!
I hope this letter finds you well! Fall is revving up and Winter will soon be upon us! In this letter you will find helpful hints about looking at your "Cost to Occupy" space, a general and office market overview, as well as some opportunities for you to make some suggestions to us. Take a moment to read this and reflect on your business needs.
I hope you too are enjoying a better business climate and an even better personal climate. I wish you best through the balance of 2011. |
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What Does My Cost of Occupancy Mean? |
What is my Cost of Occupancy Mean?
An important concept when searching for space to buy or lease as to determine a "users" cost of occupancy. Many business owners I begin to work with are able to budget their monthly payment and figure their payment calculation. It is fairly easy to determine your monthly payment once you have the square footage, lease rate (or mortgage payment if purchasing) and additional expenses like utilities and CAM (common area maintenance) charges. However, the total cost of occupancy goes much further in that it encompasses ALL a company's costs to occupy space. For example, if you own a CPA firm seeking 2,000 square feet to lease for 5 years the other variables impacting your cost of occupancy could include items such as:
- Up Front Costs like moving expenses, new furniture and system equipment, build out costs, IT system set-up, changes to office stationary, business cards, lease buy out, and other marketing material changes.
- Additional expenses like janitorial services, stops for property taxes and operating expenses need to be accounted for and projected out for the term of the lease.
- These costs need to be "netted" out against landlord concessions like rent abatement, build out allowances, moving allowances, equipment allowances, etc...
Working through this exercise will give you your true cost of occupancy. These calculations take some time but are very important to analyze and understand in order to make decisions when comparing multiple spaces simultaneously. Finally, understanding each company's cost of capital requirements and corporate tax rate will help arrive at the present value of the analyzed space in today's dollars.
Make sure you are seeking this type of advice when you decide to make your next move to buy or lease. |
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Market Overview |
In my intro article I alluded we are seeing signs of overall market improvement. Inquiries on property listings, space/land showings and transactions initiated have all seen substantial growth. Through August 2011 inquiries (calls/e-mails from all marketing efforts) have increased over 50%, actual showings of physical space/land have grow over 45% and transactions initiated has jumped 103%! Vacancies still remain high and should for the forseeable future, however I am observing fewer tenants vacating space as opposed to those leasing space. Limited new development will aid this process as tenants will need to absorb more existing space (much of which is still raw) before any new construction can happen.
Lastly, I have been approached by bankers recently letting me know they are looking to do more real estate lending than in the past few years...All good signs. Keep your fingers crossed this continues.
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Office Market |
The large majority of my efforts are focused on office leasing specifically 1,000 -3,000 square feet. The office sector is one of the hardest hit sectors the last 5 years, needless to say. Vacancies still are very high in suburban markets, above 25% in most cities with 250,000 square feet of space. Other towns, like St Charles, are above 30% vacant with well over 300,000 square feet of available space. Medical office appears to be a submarket where there is still some demand, as the need for services in an aging population and technological advancements are facilitating continued growth.
In office transactions I have brokered many landlords are still very willing to offer sizable allowances, in some cases turn-key build-outs, with abatement of several months for credit worthy tenants.
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Quick Links
We are still seeking space for the following buyers and tenants:
1) Personal Trainer - seeking 1000-1200 SF of open floor space on the far east side of Aurora, RT 59 or North Plainfield. Contact Nick for more details.
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Third Day Commercial Real Estate Company exists to provide the highest quality professional service to its clients. Nick is looking to develop long term relationships in the communities he serves while giving sound advice based on market research, knowledge and experience. Third Day Commercial Real Estate's focus is on sales and leasing brokerage of land, retail, and professional office properties, as well as, buyer/tenant representation. Nick has a reputation for ethical integrity and service that exceeds expectations.
If you or an associate is looking for professional advice in the field of commercial real estate and would like to speak to me about how I may be able to help, please call or e-mail me. I am looking forward to the opportunity to serve you.
Sincerely,
Nick Weis Third Day Commercial Real Estate 47 Crestview Drive |
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Featured Listings:
St. Charles Executive Center
2570/2580 Foxfield Dr. - St. Charles, IL
This newer construction building offers 482-9,833 square feet of medical or professional office space for lease. The building presents high-end finishes with and is move-in ready. Space sizes are flexible and pricing is competitive. Features include abundant parking, large common areas, key card access, HVAC, janitorial and conference room. Located close to downtown St. Charles, DuPage Airport and Pheasant Run Convention Center. Executive Suites available from 125 SF + with many common amenities.
Farmington Lakes Office Campus - Oswego, IL
Oswego's first corporate office park! This new construction building offers 450-52,765 square feet of new single story office space for lease in a natural corporate setting. Turn key build out or generous allowances available; full service gross lease including utilities. Professional features included: conference room, reception area. Located in a busy, growing area close to abundant retail, restaurant and residential housing. Pad sites also available from $99,000.
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Third Day Commercial Real Estate
Negotiates 3 Leases in Month of August
Oswego, IL - Third Day Commercial Real Estate announces its closed transactions for August 2011.
- The first is the negotiation of a lease for 300 square feet of first floor space at St. Charles Executive Center located at 2580 Foxfield Drive in St. Charles. Nick Weis, broker and owner of TDCRE, and Nikki Lazzaro, of Metro Chicago Management, represented both landlord, St. Charles Executive Center Owner, LLC, and new tenant, All Care Direct.
All Care Direct, a manufacturer of medical related equipment with production in Bartlett, signed a short term lease. Terms of the transaction were not disclosed. New owners of 2570 and 2580 Foxfield Drive in St. Charles have committed substantial funds to making significant long term improvements to the buildings. - Third Day Commercial Real Estate also closed a lease for 1,310 rentable square feet of first floor medical space at MedCom Center located at 3535 East New York Street in Aurora. Nick Weis acted as dual agent in the transaction between landlord, MedCom Group, LLC, and new tenant, LaPlant Foot and Ankle Clinic, LLC.
LaPlant Foot and Ankle Clinic, LLC is relocating its office from Bloomingdale, IL to serve the local population in late 2011. The firm signed a long term lease with options to renew; substantial build out and abatement was provided by the landlord. MedCom Center is more than 50% leased and continues to attract medical users seeking a state of the art building with visibility on heavily travelled East New York Street in Dupage County Aurora.
- Finally, TDCRE negotiated a lease for 1,343 rentable square feet located at 1771 West Diehl Road, Suite 370, in Naperville. Ownership was represented by John Clark and John Norris, of Grubb and Ellis, and Nick Weis represented the tenant.
The new tenant, Advocate Consulting Group, LLC, a leader in Information Technology management, networking, repair and website development, relocated its offices to nearby Naperville. Advocate signed a long term lease with substantial abatement and TI provided by the landlord, 1771 West Diehl Road Associates.
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I'm Listening... | |
In an attempt to better serve you I sent many of you a request to respond to 5 basic questions about my work for you, your commercial real estate needs and where you go for networking. It is important for me to understand exactly what my clients need and how I can better meet those needs. Here are the five questions: feel free to post your responses to TDCRE's Facebook wall or Email them directly to me:
1) Please tell me what I did well in representing you in the transaction?
2) Please tell me what you think I need to improve on in the transaction?
3) Where do you go for professional development, marketing and networking?
4) How active is your business in communicating with your customers on Facebook and do you find that beneficial?
*Download a printable copy of this survey
Voice of the Client:
What commercial real estate information would help you make decisions in your business? Here are some examples of what clients would like to know:
- "Comparables on recent transactions and the economics of each deal."
- " Who are the new users and developments coming into the area (before they move in) like new data centers."
- "Available financing and who is providing it."
Tell me what you would like to know about commercial real estate that would help your business!
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Third Day Commercial Real Estate
47 Crestview Drive
Members of:
Some Clients I have Served:
- Advocate Consulting, LLC
- Union Health Service
- MedCom Group
- Farnsworth Eye Care
- Michael Tierney, DDS
- Lighthouse Financial
- Jameson Development
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