Op-Ed, Commercial Real Estate, Bay Area
greg fogg
TenantSee Weekly: What Do You See?

When you look at an office building, what do you see?  Maybe you see the architecture.  Maybe it’s the neighborhood, the restaurants, and amenities.  Perhaps, you see the views from within the building.  This is what most people see.  They’re all important.  But it’s what you don’t see that matters most.

TenantSee Weekly: What Do You See?
Op-Ed, Commercial Real Estate, Bay Area
greg fogg
TenantSee Weekly: Knowing Your When

We see a lot of confusion in the market around when to begin negotiations.  It’s not an insignificant consideration.  In fact, when you begin can make a huge difference in the outcome.  It’s understandable that tenants would not know when to start.  Brokers are not always keen to start at the right time, since compensation is derived by transacting and the closer the tenant is to lease expiration, the faster it will need to transact (and the fewer options it will have).  Good for the broker, bad for the tenant.  This creates a misalignment of interests that discourages thoughtful consultation on the front end – the more time a broker spends on a project, the lower the compensation. 

TenantSee Weekly: Knowing Your When
Op-Ed, Commercial Real Estate, Bay Area
greg fogg
TenantSee Weeky: A Big Decline in Rents, Four ...

Throughout 2020, the prevailing sentiment among investors in the San Francisco office market was one of relative optimism.  After all, despite the fact tenants were prohibited from occupying their buildings, they continued to collect full rent.  The buildings were full, with vacancy hovering around 4%.  Sure, companies weren’t happy about paying for space they couldn’t use, but business was good.  In many cases the tech sector (which makes up most of San Francisco’s office occupancy) was booming due to an even greater reliance on and usage of tech caused by pandemic driven changes in how people were living.  Throughout the course of 2020 there was no reason for San Francisco investors to panic, as few (if any) office occupiers were showing signs of developing long-term hybrid or remote-first strategies.  Most were simply focused on solving for ongoing operations as a temporary reaction to the pandemic.  Yet early indicators did point to a future in which companies would be shedding office space, as some expiring leases were not replaced.  This, coupled with the addition of new supply, caused a big increase in vacancy to nearly 12% by year end.  Despite this large uptick, the brunt of the sluggish demand dynamic was being felt in the sublease markets, where rental economics more accurately reflected the true state of the market.  Despite a total closing of the office market in 2020, average asking rents ended the year off just 6% from the pre-pandemic high.

TenantSee Weeky: A Big Decline in Rents, Four Years in the Making
Bay Area, Commercial Real Estate, Op-Ed
greg fogg
TenantSee Weekly: Modern Workplace Planning: ...

In the years leading up to the pandemic, most medium and small companies defined their office space need based on headcount (current and projected), space programming, and industry/sector norms.  The exercise was mostly formulaic.  The primary differences in the offices of a small, regional law firm compared to those of an AM Law 100 firm would be scale, the cost of finishes, and the quality of the building and views.  It was planning for the same outcome, just at different levels on the cost spectrum.  Companies having a larger portfolio of offices would typically create a “workplace strategy” that included guidelines around programming (e.g., space layout, office size, critical adjacencies, growth factor, finishes, FF&E, etc.).  These guidelines could then be used to inform the real estate process across geography.

TenantSee Weekly: Modern Workplace Planning: Solving for Experience Part I: The Purpose
Bay Area, Commercial Real Estate, Op-Ed
greg fogg
TenantSee Weekly: This, or That?

Negotiations are always about (or should always be about) this or that.  There’s always something else, maybe that something else is nothing (as in sometimes the best thing to do is nothing at all).  Decisions made without proper consideration of all relevant alternative scenarios are decisions made poorly.  As important, in the context of office lease negotiations, the best negotiated outcomes are directly correlated to the extent to which we understand the alternatives of the landlord counterparty.  This is a bit counter intuitive, allow us to explain. 

TenantSee Weekly: This, or That?

Commercial Real Estate

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Why Office Rents Fall Unevenly

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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.~

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How To Sublease with Success: The TenantSee Approach

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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.

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PROCEEDING CAUTIOUSLY IN UNCERTAIN TIMES - TENANTSEE SERVICE DIRECTORY

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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.  ~