San Francisco

TenantSee Weekly: Why Institutional Investment Keeps Rents High

TenantSee Weekly: Why Institutional Investment Keeps Rents High

When I began my real estate career in San Francisco in the early 1990s, office buildings were mostly owned by private investors using a relatively small selection of institutional capital partners. The Shorenstein Company, whom I worked for from 1990 – 1995, was a great example. At that time, they were the largest owner of office buildings in San Francisco, holding 11M sf. During those days, most owners, including Shorenstein, employed a simple strategy centered on preserving tenants while minimizing cash requirements (funding of tenant improvements, etc.). In most cases, the first choice was to keep the existing tenant by offering a rental rate which was discounted to market. If that failed and the tenant moved out, the next step was to undercut the market by lowering the rental rate to steal a tenant away from another building. The goal was to buy and manage the asset to generate maximum cash flow, which the investors counted on each quarter. Importantly, the majority of assets were owned by this type of investor. But by the mid-1990s, the nature of office ownership was beginning a period of significant change which would materially impact rental economics for decades to come.

TenantSee Weekly: A Level Playing Field

TenantSee Weekly: A Level Playing Field

This week we’re writing about an old topic that surfaces every now and again, usually when we come across a tenant who has chosen to negotiate a lease or lease renewal on its own. Why would a tenant do so? I think the most common reason is perceived savings. This scenario seems to play out most often in buildings owned by private investors (e.g., not institutions). Buildings where the landlord calls the tenant directly and proposes to renew the lease at a discount if the tenant negotiates without a broker.

TenantSee Weekly: Less Space, More Uncertainty

TenantSee Weekly: Less Space, More Uncertainty

Over the past year our small team based in San Francisco has not worked on a single assignment in which the client is expanding its leased office space. In some cases, the leased footprint remains the same, but many clients are decreasing their leased space. We're doing work all over North America. Client approaches to the office range from the following:

TenantSee Weekly: We're In A Pandemic, Why Is My Rent Increasing?

TenantSee Weekly: We're In A Pandemic, Why Is My Rent Increasing?

This is a common question for tenants looking to negotiate lease extensions in the current market environment. Intuitively, they expect their occupancy cost to decrease due to the effects of the pandemic (e.g., higher vacancy, less demand, etc.). However, they often fail to realize the point of impact, or the base values on which market softness has its affect, are values that were in place just prior to the pandemic, not values from 5+ years ago when they signed the original lease…

TenantSee Weekly: A Short Discussion of Operating Expenses and Taxes (Insert Big Yawn Here)

TenantSee Weekly: A Short Discussion of Operating Expenses and Taxes (Insert Big Yawn Here)

I know. This is painful. But you need to understand it, so here goes. A third or more of a tenant’s occupancy cost is attributed to the operation and taxation of the building in which it leases space. Yet these costs and how they are distributed are often a source of confusion.

TenantSee Weekly: The Math Behind the Motivation

TenantSee Weekly: The Math Behind the Motivation

Occupiers often think pricing for office space is one dimensional. Sure, they understand that different quality buildings and spaces translate to different prices. But pricing is actually complex and dynamic, based on many variables, including specific owner motivations. And motivations vary significantly from one owner to the next.

Market Outlook Q2 2021- Tenant Perspective

Market Outlook Q2 2021- Tenant Perspective

This San Francisco office market report is provided compliments of Samantha S. Low and Greg Fogg, Co-Founders of TenantSee. TenantSee is a tenant real estate product combining a team of subject-matter experts with powerful technology to make tenant real estate smarter, faster, and better. Our report is intended to provide you the tenant, with meaningful insights, not raw data.

Market Outlook Q1 2021- Tenant Perspective

Market Outlook Q1 2021- Tenant Perspective

This San Francisco office market report is provided compliments of Samantha S. Low and Greg Fogg, Co-Founders of TenantSee. TenantSee is a tenant real estate product combining a team of subject-matter experts with powerful technology to make tenant real estate smarter, faster, and better. Our report is intended to provide you the tenant, with meaningful insights, not raw data.

Market Outlook Q4 2020 - Tenant Perspective

Market Outlook Q4 2020 - Tenant Perspective

To our clients and loyal followers…In a departure from our normal practice, we’ve chosen to write a letter to close out what has been a most unusual year. With respect to office space, it’s no stretch to describe 2020 as the most impactful year of the past century. What changed? In a word: everything.

Market Outlook Q3 2020 - Tenant Perspective

Market Outlook Q3 2020 - Tenant Perspective

This San Francisco office market report is providedcompliments of TenantSee. TenantSee is a tenant realestate product combining a team of subject-matterexperts with powerful technology to make tenantreal estate smarter, faster and better. Our report isintended to provide you, the tenant, with meaningfulinsights, not raw data.~

Maximizing Employee Engagement Through Total Workplace Ecosystems

Maximizing Employee Engagement Through Total Workplace Ecosystems

The Covid-19 pandemic is not only the most significant public health challenge of our time, it is also massively disrupting the way we live, socialize and work. While corporations navigate a rapidly changing business landscape, they’re also forced to solve for new operational challenges they’ve never seen before. This is a highly complex time. Among the most significant challenges is that of creating optimal workplace solutions that foster employee health and wellness, are sensitive to the differentiated employee needs and maximize employee engagement/productivity.

Market Outlook Q2 2020 - Tenant Perspective

Market Outlook Q2 2020 - Tenant Perspective

This San Francisco office market report is providedcompliments of TenantSee. TenantSee is a tenant realestate product combining a team of subject-matterexperts with powerful technology to make tenantreal estate smarter, faster and better. Our report isintended to provide you, the tenant, with meaningfulinsights, not raw data.~

TenantSee: Modern Solutions

TenantSee: Modern Solutions

Office space is a physical environment in which employees gather to fulfill the goals of the corporation, the most obvious being profit. The way employers use office space has continuously evolved over the years most notably as new technologies emerge. Over the past 2 decades many technologies have been developed that would otherwise enable a significant shift in the way we work, especially in terms of where we work. However, notwithstanding the presence of these technologies, employers have mostly been reluctant to fully embrace their use due to uncertainty around how such changes would affect productivity and culture. The covid-19 pandemic forced everyone to embrace tech, shifting most workers from offices to working from home. Employers have been surprised to find their worst fears unfounded. 

Armed with the knowledge the enterprise can survive, occupiers find themselves having a new conversation about workplace solutions. This is among the more valuable corporate undertakings of the past century. Why? Because office space is not really about buildings, location or even cost…it’s about supporting and promoting employee engagement. Engagement can be defined in a variety of ways but the simplest way to think about it is in terms of how well the employee is thriving.  A thriving employee understands, is connected to and contributes to the corporate culture. She is healthy and happy. She is loyal and disinclined to seek other opportunities. She is productive. There are many drivers that contribute to employee engagement but the workplace is among the most impactful.

Why Office Rents Fall Unevenly

Why Office Rents Fall Unevenly

Over the past decade as demand surged and supply became increasingly limited, office rents rose uniformly across the bay area. But now that demand is waning and supply rising, don’t expect landlords to make downward price adjustments in unison. Landlord behavior varies by type of landlord (private capital, REIT, institutional fund), debt and equity, stability of tenancy and cost basis. While product type may be comparable (e.g., class A office buildings in the San Francisco financial district), individual owner motivations reflect the highly differentiated interplay of these variables.~

How To Sublease with Success: The TenantSee Approach

How To Sublease with Success: The TenantSee Approach

Recessionary pressures often result in reduced hiring and/or lay offs, leading to excess office space. The COVID - 19 Pandemic has forced many San Francisco tenants to look to the sublease market to mitigate the expense of excess office space. Over the past decade it has been relatively easy for occupiers to secure subtenants, often at a profit. Yet in times of macro-economic uncertainty, many tenants are surprised to learn their space is worth less (sometimes considerably less) than their cost basis. This is one of those times.

PROCEEDING CAUTIOUSLY IN UNCERTAIN TIMES - TENANTSEE SERVICE DIRECTORY

PROCEEDING CAUTIOUSLY IN UNCERTAIN TIMES - TENANTSEE SERVICE DIRECTORY

Among the many reasons we created TenantSee is our belief that tenant real estate services should be full-scope, easy for occupiers to access and delivered with total transparency.  Most real estate service providers simply don’t have the scale to address the entire spectrum of occupier need.  The handful that have such scale require tenant clients to navigate a maze of siloed service lines that are poorly integrated with conflicting agendas.  TenantSee, powered by Cushman & Wakefield, offers occupiers industry-leading resources accessible through an award-winning technology platform from which services and outcomes are delivered and measured with transparency.  ~

Market Outlook Q1 2020 - Tenant Perspective

Market Outlook Q1 2020 - Tenant Perspective

This San Francisco office market report is providedcompliments of TenantSee. TenantSee is a tenant realestate product combining a team of subject-matterexperts with powerful technology to make tenantreal estate smarter, faster and better. Our report isintended to provide you, the tenant, with meaningfulinsights, not raw data.~

Start at Why

Start at Why

Technology has had a growing impact on how corporations think about labor, facilities and cost.  In particular, companies have found that they don’t always need to have a physical presence to be present.  And where they are physically present, they seek deeper understanding of how to design their facility to maximize employee engagement.  In short, the scale and design of the modern workplace is rapidly changing in response to technology.

Five Critical Advisor Ingredients For Office leasing Success

Five Critical Advisor Ingredients For Office leasing Success

In my 30-year career in commercial real estate, I’ve seen all kinds of marketing strategies. In my experience, tenants are often unaware of the key qualities in an advisor that reliably predict success, making them susceptible to selecting the wrong advisor. To achieve optimal office leasing outcomes, occupiers need to engage a service provider who possesses the following critical ingredients:

1. Market intelligence.

2. Planning.

3. A full-scope team.

4. Thought leadership/strategy.

5. Experience.

Total Awareness: TenantSee Market Diagnostics Help Tenants See the Big Picture

Total Awareness: TenantSee Market Diagnostics Help Tenants See the Big Picture

You signed a 10-year lease 7 years ago. Since then, the market value of your space has more than doubled. At this pace, you’re looking at a huge price increase in 3 years. What should you do? Today in the San Francisco Bay Area marketplace, this is the single most common discussion we have with tenants. Since our approach to this question is always the same, we thought it made sense to describe it here today. The question “What should we do?”, is really comprised of 3 questions.