Office lease negotiations are complex, and tenants who lack strong representation are often at a serious disadvantage—they don’t know what they don’t know. One key area where this shows up is the tenant improvement allowance (TIA).
TenantSee Weekly: Subleasing Office Space - What Tenants Need to Know
TenantSee Weekly: The Exclusive Right to Represent
At TenantSee, we only advise clients under a formal working agreement that clearly outlines our role as the exclusive representative, the scope of services, and how we are compensated. It’s a short, straightforward document—but a vital one. It establishes our fiduciary duty and marks the official beginning of our advisory relationship.
TenantSee Weekly: The Long Shadow
When companies select a real estate advisor, one crucial yet often overlooked factor is the advisor’s credibility with landlords. It’s understandable why this isn't top of mind — credibility is difficult to measure. But it can be among the most valuable assets your advisor brings to the table. Let's break down what "credibility with the landlord" means and why it matters.
TenantSee Weekly: Is ChatGPT Better Than You (Me)?
If you’re a business professional—accountant, lawyer, engineer, or even (gulp) an office broker—you’ve probably wondered: Can AI do my job better than me?
As a broker who advises office tenants, I tested ChatGPT in a domain I know well. I asked it for average Class A office rents in downtown San Francisco over the last 30 years, including supply and demand dynamics. In less than a minute, it delivered a surprisingly accurate answer.
TenantSee Weekly: What Tenants See Impacts Tenancy
Most of what tenants need to see in order to make smart leasing decisions is not immediately visible. It must be uncovered through strategic discovery and analysis. That’s the mission of TenantSee: to provide the process and resources that bring hidden factors to light. We don’t make decisions for our clients—we make their decisions better.
TenantSee Weekly: What Really Matters
In the business of advising office tenants on leasing space, services are provided by a wide range of firms—from solo practitioners to global public companies with thousands of employees. As in any competitive industry, each firm tries to differentiate itself by highlighting its strengths while casting doubt on the competition.
TenantSee Weekly: AirOffice
For many companies, office space is among a variety of resources they make available to employees to help facilitate work. Other primary resources include technology. In fact, today, technology arguably contributes more to how work is done than the physical office. The diminished role of the office in facilitating work has resulted in changes in how companies look to use office space. One manifestation of this change is in flexible offices, or coworking spaces. This product segment, having grown considerably over the past decade, is tangible proof of shifting consumer sentiment.
TenantSee Weekly: What's Missing
Negotiating office leases is like any other complex financial decision in that more information leads to better decisions. Yet companies face challenges acquiring the right information at the right time. Why? Because the services typically offered by real estate brokerages are centered on transacting based on site selection and the negotiation of basic rental economics. This is not enough. Sometimes, these services (at least) include a level of multi-building negotiation, exercising a degree of leverage, but too often they lack the proper structure to gather and assess critical data, data that will have a big impact on outcome.
TenantSee Weekly: What Will We Do?
TenantSee Weekly: Work
Over the past several years the concept of work has undergone more change than at any point in recent history. While there’s many narratives, one common discussion centers on changing where and when we work to make work less harmful to our health. This is exemplified by remote work.
Work can certainly be harmful. Yet few among us can avoid harm. Indeed, harm often comes to us in ways we cannot and do not anticipate. Sometimes what seems good turns out to be bad. The very world in which we live is full of harmful realities. I’m not convinced the absence of work brings less harm. Nor am I convinced the changes we’re seeing now around how and where we work are as good for us as we hope they will be. I think we’re generally failing to account for a variety of negative consequences that are slowly becoming more apparent.
TenantSee Weekly: Active Listening, the Skilled Negotiator's Secret Weapon
Office lease negotiations are complex, involving numerous parties (the principals and their advisors), and covering a wide range of issues, from economic to legal. The most effective negotiators are those who possess both a deep understanding of the markets, and the ability to actively listen while negotiating.
TenantSee Weekly: Thinking About Physical Spaces
I suspect most of us are caught off guard by change at scale. When thinking about the pace of change over the last 15 years, it’s clear we’ve entered a new era, one in which technology is enabling us to rethink EVERYTHING. Change in how we design and occupy physical space is inevitable. The skyscraper boom began in the late 1800s and the product playbook in urban core office markets has remained mostly unchanged for decades. Similarly, the ways in which the office product has been developed and owned, the investment thesis, has been largely unchanged in how it relies on capturing the best occupants in leases that reflect the highest possible pricing and the longest possible term to generate stable net operating income and bankable future value.
TenantSee Weekly: Bottom?
Have we hit bottom in the pricing of San Francisco office assets? Maybe.
The historical measures by which office buildings were valued, a function of capitalized net operating income, doesn’t apply to assets having large vacancy and limited weighted average lease term (“WALT”). These assets are trading at a simple cost/sf metric. Investors take a long-term view of the investment, betting the value for San Francisco office will, ultimately, recover. They may or may not use debt to finance the acquisition – where there is limited occupancy, they may not be able to secure debt.
TenantSee Weekly: Q2 2023 The Tenant's Perspective
Occupiers continue to add sublease space to an already saturated market, and to downsize their occupancy requirement at lease expiration. Market participants, including investors, are now accepting as fact the new ways of using office space will result in less demand for their product. During the first couple of years of the pandemic, investors, enjoying record high levels of occupancy and strong cash flow, naturally chose to believe in a future narrative that included a rebound to 2019 demand levels. Their optimistic (if not realistic) outlook had them waking up in 2023 with 7m to 10m square feet of demand and 4% vacancy. But it’s now clear this is not how things are playing out.
