"Trends Show Increased Interest in Utah's Commercial Real Estate Market"

"Trends Show Increased Interest in Utah's Commercial Real Estate Market" - Press Release in Utah Business Magazine Online - April 24, 2012

"For the office market, Casey Mills, CCIM, NAI Office Division vice-president, said compared to the first quarter in 2011, the first quarter of 2012 shows a significant drop in the vacancy rate in Salt Lake County from 15.37 percent to 13.78 percent. “We’re finally starting to hear companies in our market talk about expansion and actually pull the trigger on taking additional space,” Mills said. “There has been an increase in expansion deals during the last 12 months and I think that will continue.”

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First Option Mortgage Renewal and Expansion

www.firstoptionmortgage.com

First Option Mortgage, a national mortgage and lending company, recently  expanded their office here in Salt Lake City. The company which is based in Atlanta Georgia is a premier provider of mortgage services. They currently have offices in 43 states.

David Dixon of NAI Brannen Goddard based in Atlanta worked through the Mills/Wayman Team to complete the renewal / expansion of First Optoin Mortgage's space in the Union Park area of Salt Lake.

First Option Mortgage's mission is:

"Treat customers with respect and understanding, separate fact from fiction so the borrower can make informed decisions, and stay on the cutting edge of technology to keep ahead of the financial trends and practices. Above all, we ensure the borrower walks away with confidence in their mortgage decisions."

Jviation New Office Location

Logo taken from www.Jviation.com

Jviation Inc. a planning, design, and construction administration firm that focuses solely on aviation-related projects recently opened a new Salt Lake City office at 155 North 400 West, Suite 580. The new office was opened to allow quick and easy communication with their Utah Clients. The principals and staff have completed national and international airport projects for over 20 years. They have worked on and continue to work with prominent Airports like Denver International, Honalulu International and many others.

The Mills/Wayman Team was excited about the opportunity to assist Jviation in identifying an appropriate office location that fit their economic needs and portrayed effectively their company culture. The Salt Lake Hardware Building at 155 North 400 West is a unique building offering unparalleled common areas that effectively merges historic and modern styling. 

Renewing your Office Lease

Picture from Business Insider - Your money.

It seems like a simple process. The Landlord or Property Manager gives you a friendly call to discuss your upcoming lease expiration. You have a cordial conversation and the Landlord proposes some easy lease extension terms that are similar or even a small discount from your current monthly obligation. He sends over a one page lease amendment you sign and go on with running your business.This is the single biggest mistake you can make in the process.

Although signing a quick lease extension can be very quick and easy it is costing you a significant amount of money! This happens approximately 70% of the time. Below are 5 tips for renewing your office lease that can save you a significant amount of money and get you the best lease terms possible.

1.   START EARLY

You should allow 9 – 12 months letting the entire process play out. It takes time to research alternative properties, gather comparable lease information, engage in negotiations with other landlords, and finally after seeing all the information to go back to your current Landlord. The closer you are to your lease expiration the better leverage your existing Landlord has against you.

2.   GET GOOD ADVICE

Although that initial call that you will receive from you property manager or Landlord may not feel like a negotiation, IT IS! The Landlords number one priority, and rightfully so, is to increase the value of his asset. By engaging a tenant representative professional you get the benefit of a person that has just as much if not more experience in negotiating an office lease as the Landlord. They will know the key deal points to look for and will have market knowledge of what types of deals you’re Landlord and competing Landlords have been doing. Rent Abatement? Tenant Improvement Allowance? Rate Reduction?

3.   UNDERSTAND THE TRUE COSTS OF MOVING

Understanding the quantitative and qualitative costs of moving office space or staying put.

Quantitative Costs: Rental Rate, Occupancy Costs, Concessions, Tenant Improvements, Technology Costs, Furniture, Down Time, ect.

Qualitative Costs: Office Perception, Corporate Image, Amenities, Workforce, Moral, Visibility, Upgrade, ect.

It is important to look at these costs and analyze if renewing or moving is the best long term decision for your company. A qualified tenant representative will be able to assist you in creating financial models to compare these costs and how they can affect you decision.

4.   CREATE A COMPETATIVE ENVIROMENT

The best arrow in your landlords quiver is the knowledge that moving is a hassle and that it cost money. Most Landlords feel that they are negotiation from a position of power because of these facts. This same confidence can be used against the Landlord by creating competition! By engaging the assistance of a tenant representative professional alone goes a long way to put the Landlord on notice that you are educated and want the best deal. The next step is the competitive environment that you’re Tenant Representative can create by successfully taking you to the market. It is a tenant friendly market, and this can be used to your advantage!

5.   ANALYZE & PULL THE TRIGGER

Your Tenant Representative should be able to place all the options including the Landlords renewal proposal in a simple financial model that will allow you to compare the costs of each option. As well as helping you to analyze the qualitative differences to allow you to make an informed decision.

In many cases you will still just renew. But by going through the process you will know why you did and have the confidence that you received the best possible deal.

Mills/Wayman Team Closes Downtown Lease

Logo from www.go-lighthouse.com

The Mills/Wayman Team was able to complete a lease this week at 375 East 500 South. Lighthouse Research leased the space for a significant term. Lighthouse Reserach that was founded in 1992 is a full-service marketing research firm providing a broad-spectrum of quantitative and qualitative services.

To receive information about office space in Utah - CLICK HERE
To learn more about Lighthouse Research - CLICK HERE

Dr. Linneman Global Economic Outlook - Webcast

If you missed Dr. Linneman's Global Economic Outlook Webcast and wanted to hear what he had to say CLICK HERE

2011 Year End Market Report

Click to Download Full Market Report.

OPTIMISM has to be the word that springs to mind when reviewing the Salt Lake County Office Market for 2011. Various “corrections” were underway that seemed painful but are a path back to stability. There are also some very positive elements illustrated in this market study that indicate a strengthening in the economy and foretell a continuing uptrend for 2012. On the positive side, the overall direct vacancy rate dropped 1.5 points to 13.71%, the lowest it has been since 2007, and the class “A” vacancy rate at 8.72% is down nearly seven points from those 2007 levels. The southeast submarket had the lowest overall vacancy rate at 7.8%, perhaps signaling an opportunity in that area. The greatest number of leases signed by far were in the central east submarket (93) followed by the central
business district (59), but the activity achievements of those submarkets were equaled or eclipsed by the actual square footage of deals done in the north west (565,813 SF) and south west (448,185 SF) submarkets, also indicating future opportunity for developers or investors in these areas.

The best news overall has to be the 590,562 SF of net absorption in the total market. This follows two years of negative absorption. The total number of lease deals done (339) was up 25% over 2010 levels and the square footage leased or activity (2,558,811 SF) was up 21%. Overall asking rates are down 7% over a 3 year period with Class “A” rates taking the biggest fall, while class “C” rates were almost unchanged.
Evidently, there is tough competition in the high-end office market. Tenants are attracted to quality buildings with aggressive lease rates. We believe, based on the lower vacancy rates and increased absorption levels, that this rate correction phenomenon is over.

On the office investment side, the number of transactions was up an average of 60% in each of the last two years, and the total dollar volume of the sales, while being four times larger than in 2009 or 2010, was only a fourth of the 2007 volume. Office cap rates for class “A” buildings, however, approached 7% -- investors are bidding up quality buildings. Also to the positive, owner user sales in all classes are trending up even though the average asking sales prices are down slightly. It appears the latter made the former possible.

New construction in 2011 was encouraging, but given the improved Utah economy and our office market, we expect to see more announcements in 2012 of “build to suits” and “spec” developments. Expect the positive momentum experienced in 2011 to continue into 2012!