In general, if the remaining lease term is one year or less many Tenants may just ride things out. Other companies may decide to hang onto their excess space, because management believes that things will soon improve and they will be hiring again. Other companies may feel that shedding space may send the wrong message to customers and/or employees.   The reasons are varied, but if the economy continues to under perform this space will start coming back into the market as sublease space – significantly impacting the commercial real estate market in Denver.  Large blocks of sublease space act to drive up the overall office vacancy rates and act to depress overall office lease rates, because the sublease space can often be leased for significantly less than “direct space” offered by Landlords.  This is bad news for Landlords and for Tenants trying to shed space, but great news for Tenants looking to lease space!

So, if you’re an office Tenant looking for deals, don’t be afraid of the shadows, because Shadow Space means that good times could be ahead!

Image Credit: Simon Lesley | CC2.0

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Guidance Corporate Realty Advisors
COMMERIAL TENANT'S & BUYER'S BULLETIN
Lease Rates are Not What They Seem

Lease Rates are Not What They Seem

When reviewing the commercial office lease rates advertised by Landlords, we are often struck by the disparity between these advertised rates and the “Net, Effective” rates typically achieved...

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Guidance Corporate Realty Advisors provides corporate tenant / buyer representation services to corporate real estate users in the Denver metropolitan area including Boulder, Colorado. Guidance also provides these services in all major U. S. markets, as well as markets in Canada, Asia, South and Central America, and Europe.

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