Atlanta Journal Constitution: Reconfiguring Office Space
We certainly have our share of vacant space in the Tampa market. The downtown corridor is expected to top 20% this year. Vacancy is usually associated with failed businesses, but that is not always the case. There are many surviving businesses, for example, that needed 10,000 square feet in 2006 and now only need 6,000 square feet. The “shadow” market vacancy rate can be much larger than the published rate, particular in downturns, like the one we are currently experiencing. Businesses have retracted and they have either laid off workers or natural attrition has taken its course. The problem is, the leases can run for years after the space becomes available. What can or should these businesses do with all of their excess space. Here are a couple of ideas:
- Donate the space to charity – Non-Profits have been hit particularly hard by this downturn. Many are finding it difficult to sustain themselves. If the tenant is not using the space, donating their excess space (and allowing the non-profit to remove or reduce their current rent overhead) could allow a local charity to keep their doors open and continue their good work for the community.
- Sublease – There is an ACTIVE sublease market. Some of these spaces are advertised. Other businesses prefer to not actively “market” their space. Sub-lease spaces are almost always rented at less than current market rates. This can offer very good opportunities for companies in the market for space.
- Renegotiating with the Landlord. There are all kinds of ways to do this. Your landlord understands that this is a challenging market. They are usually willing to try to keep good tenants and there are many ways in which the landlord can show goodwill to the tenant without a major disruption in rent or income for the landlord.
- Sharing office space. Start-up firms are often willing to share space with an established tenant for a short period of time, while their business is getting off the ground. There may even exist synergies between the two firms that would create business growth for both companies.
