Any number of us could write a new chapter to Richard Farina’s book, “Been Down So Long it Looks Like Up to Me,” from the 1970s. This last down cycle took us down – almost to the railroad tracks and had us hunting for the old tune by Nancy Sinatra and Lee Hazelwood by the same name. http://www.youtube.com/watch?v=stp2hCsOFGY
Indeed things are starting to look up, but we aren’t rising at the same pace or profit level. Rental rates are nudging back up in some sectors. That isn’t quite good news to those expecting free rent come to accompany any lease made for the last three years most anywhere in the United States. In the last 6 months I’m starting to see some areas move away from the free rent. I was surprised while recently negotiating a lease in downtown Detroit a landlord was only willing to give a little free rent as his building approached the 5 percent vacancy rate.
Troy, Mich, enjoyed a very low vacancy rate while Detroit had high vacancy. With the loss of EDS in Troy this market still looks down to us. According to Costar’s third quarter report the vacancy rates for Detroit is now 18.9 percent compared to Troy’s 31 percent. What a difference five years can make.
The good news is rental rates are at their lowest point in years. If your firm has been leasing space on a year to year basis for the last five years it is time to have a professional tenant representative take a look at your lease rate to determine if you are over paying. You might qualify for a major price reduction or an increase in building services which is a way of making good news out of a lousy situation.
.Hold tight, we believe the economy is truly on the move. We’ll all be singing the famous song from Broadway’s 42nd Street, “We’re in the Money.” http://www.youtube.com/watch?v=6BE-sS06BWQ