Los administradores de TransicionEstructural no se responsabilizan de las opiniones vertidas por los usuarios del foro. Cada usuario asume la responsabilidad de los comentarios publicados.
0 Usuarios y 33 Visitantes están viendo este tema.
(click to show/hide)CitarWhy Warner Bros., Facebook, Equinox want to be your office landlordLois Weiss | Jan. 19, 2024The world is an oyster for office sublease renters with some 20 million square feet on the market and landlords who are eager to make deals.NY Post photo compositeNew York’s commercial market is being crushed under the weight of 20 million square feet of available office subleases. Until that space is absorbed by new tenants, the market can’t move forward, according to Ruth Colp-Haber of Wharton Property Advisors, who specializes in these deals.“It’s a predictor of the market,” she said, noting that sublease rents are generally 25% lower than the cost of leasing directly from the building owner. “They will undercut the direct leases and it’s very difficult for the owners. Many can’t and won’t compete with the subleases.”And as expected, tenants are wasting no time to capitalize on their leverage.“We are seeing well-located, nicely built-out subleases move quickly, especially in Soho,” said Adam Henick of Current Real Estate Advisors. Manhattan subleases cost 25% less than a direct deal.Getty Images/iStockphotoSubleases can be offered by both large and small companies that are either moving elsewhere sooner than they thought or simply needing to shrink their footprint. Those in advertising bulk up their headcounts when they win a major client, but also shrink their footage when they lose them. The pandemic has also affected occupancy as some companies found they were able to maintain their businesses while working from home and now don’t need all their original square feet.As business needs change, companies may also pick up options on contiguous floors to ensure they control the space for their future growth, but then sublease out those spaces while waiting to catch up. “If you have 5,000 square feet for three years you can lease it, but if you have 50,000 square feet for a couple of years, that is a problem,” said Peter Turchin of CBRE. One of the most challenged parts of the city is Hudson Yards, where a whopping 2 million square feet of subleases are available. Companies like Warner Bros., Facebook, Equinox, Guardian Life and Pfizer at the Spiral at 66 Hudson Blvd. all have subleases on the market for both raw and furnished offices.“They are all high-quality spaces with high-quality sub-landlords providing a full-work letter and a full free-rent package and a discounted rent,” said Gabe Marans of Savills about those spots.An 89,000-square-foot sublease on the top three floors of 55 Hudson Yards has hit the market asking $165 per foot.©2022 Francis Dzikowski/OTTOBut even in this challenged market, quality doesn’t always come cheap. In October, Dan Loeb’s Third Point, put 89,000 square feet on the top three floors of 55 Hudson Yards up for sublease through July 2029 at an asking rent of $165 per foot.“We know of several tenants looking closely at the subleases at Hudson Yards,” said Jeffrey Peck of Savills. “Cash is king and having good credit is everything. If you have a creditworthy tenant, the landlord is rolling out the red carpet.”Meanwhile, Google is also offering pricey sublease space in Hudson Square since its new home opened at 550 Washington St. But other subleases are cheaper. In a recent deal near Madison Square Park, Instacart has subleased 21,000 square feet at 50 W. 23rd St. from an event platform, Bizzabo, which will remain in 10,000 square feet. There are only a few years left on the lease, but it gives both companies time to figure out their path forward. Market rents in Chelsea are now in the $80s per foot.Another bargain is from Paperless Post at 115 Broadway — aka 2 Trinity Centre — where 20,907 square feet is available for sublease for $35 per foot, according to Colp-Haber. Material Plus at 432 Park Ave. South is offering 9,800 square feet at an even cheaper rent in the mid-$30s per foot. As good as subleases can be for certain companies, there are downsides, and many tenants will avoid subleases that have just a few years remaining.Nevertheless, Michael Cohen of Williams Equities observed that even subleases with terms less than three years can provide opportunities for tenants as they become “fair game for a three-way deal.”In this manner, Cohen said, the building owner avoids a vacancy, and the original tenant is off the hook while the subtenant enjoys a new direct lease that is in part subsidized by the existing tenant.Ad giant Publicis Groupe has a 400,000-square-foot sublease at 1675 Broadway (right). It’s the best deal in the city, says CBRE’s John Maher.RudinThis past summer, a 400,000-square-foot sublease from Publicis Groupe at 1675 Broadway — an 800,000-square-foot Rudin building — was taken off the market for a few months, as the advertising giant was weighing its options. “It’s the nicest, lowest-cost sublease option in Manhattan with a great landlord and sub-landlord,” said CBRE’s John Maher, who leads the rental team. Several other tenants in the building are attorneys, including the law firm Davis+Gilbert, which added a floor in November to expand to 98,124 square feet. A big sublease from Publicis covers 132,000 square feet in the tower with a spectacular three-story atrium; around 90,000 square feet in the mid-rise and 188,000 square feet in the base. The term ends in May of 2031.“Everybody has to compete with very nice spaces for sublease,” said Marans of the landlord’s plight. (click to show/hide)Cita de: Cadavre Exquis en Enero 27, 2024, 20:05:56 pmCitarWhat Office Space Costs Landlords and Tenants NowAdd in incentives and concessions, and it’s clear tenants in major markets are getting a deal on spaceDavid M. Levitt | 2024.01.16Chicago is one of the major markets where effective rents have declined since the pandemic.Photo: Beata Zawrzel/Nurphoto via Getty ImagesFor all the emphasis on remote or hybrid work, there remain employers intent on having workplaces in office buildings like the good old days pre-pandemic. And the numbers suggest that these landlords are willing to pay more to make that happen.Effective rent — what the tenant pays after incentives like free rent and concessions such as the landlord assuming the cost of fitting out the space — has declined 10 percent nationally since the first quarter of 2020. In the third quarter of 2023, it was $22.42 a square foot, compared with $24.84 back in 2020, according to CBRE (CBRE) Econometric Advisors.Among 12 markets for which CBRE provided statistics, the highest effective rent was in Manhattan, with an average of $38.90 a square foot, a dip of 20 percent compared with the first three months of 2020. The lowest was in Houston, at $11.33, an 18 percent decline. Los Angeles was at $25.90, an 11 percent decline. San Francisco was at $35.74, a 31 percent drop; Boston at $28.71, down 4 percent; and Miami at $37.07, up 21 percent from early 2020. (Miami has been an unusually hot office market of late.)Chicago was at $13.21, a 19 percent decline; Dallas at $12.61, a 11 percent decline; Fort Worth at $11.78, a 10 percent decline; San Antonio at $14.52, a 9 percent decline; and Austin at $25.81, a 5 percent decline. Atlanta was $17.01, a 10 percent decline. The figures included each market’s suburbs and not just its central business district. New York brokers emphasize the increasingly bifurcated market, one for state-of-the-art Class A product, which is seeing unprecedented demand, and another for the more commoditized B and C office space, where demand is soft and declining. It’s the phenomenon commonly called “flight to quality.”The pandemic “was a huge blow to the office market,” said Ruth Colp-Haber, president and CEO of Wharton Property Advisors, a boutique brokerage that specializes in tenant representation and subleases. Fast-forwarding to today, she said “There is a flight to quality. It is a tale of two cities.”“That hybrid element is enabling companies to reduce their footprints,” Colp-Haber said. “The idea is to find space that’s attractive, that’s fun for employees to go into, so that’s going to be in the better buildings, often with amenities. So some companies will be spending more on a per-square-foot basis but they’re getting less space.”You “always” see a flight to quality during a downturn, said Whitley Collins, CBRE’s global president for advisory and transactional services. “Most companies feel because of the pandemic and the way we work they can take 20 or 30 percent less space,” he said. “So they move into a nicer building. So, if you cut your space by 20 percent, you can increase your costs by 20 percent. You can pay more per square foot in rent, take extra [tenant incentives]. There are a lot of companies thinking about that.”In a December report, CBRE found that “lower tier buildings” — those in the B and C classes that have lower ceilings, a more limited array of amenities, and were built with the lower and middle markets in mind — had a slippage of 3.9 percent in effective rent in 2023, compared with a 1.2 percent loss for “upper tier” buildings. The year before, in 2022, lower tier buildings’ effective rent declined 2.4 percent, compared with a rise of 2.4 percent for upper tier buildings.Stefan Weiss, a senior economist with CBRE Econometric Advisors, said that effective rents tend to be lower than base rents because effective rents include the impacts of whatever landlords pay to cover concessions and amenities, plus periods of free rent meant as an inducement for tenants to sign long-term leases. They also account for savings that tenants receive when rent increases are deferred until later in the lease.“In a challenging market, landlords typically keep their base, or asking, rent firm as long as they can in exchange for more concessions to tenants,” CBRE researchers wrote in the December report.Landlords are currently eager to give concessions to tenants, brokers say. They’re also eager to show banks the asking rents to become eligible for bigger loans.Last year nationwide, concessions in the top tier hit $98.05 a square foot, and $85.99 for the lower tier, according to CBRE. Both are recent highs. A CBRE spokeswoman said in an email that “it’s widely known” that tenant improvement costs — which are typically shared between landlord and tenant, but that have been trending toward burdening landlords more — are at a record high, considering the rising costs of materials and inflation.And, in a Jan. 8 report from Moody’s Analytics, effective rents nationwide were down the last two quarters — the most recent, the fourth quarter of 2023, by 0.3 percent — after eight consecutive quarters of rising effective rents. The research firm blamed “considerably high vacancies.”What seems to be happening is that landlords, spooked by rising vacancy rates and what had been rising interest rates, were building in lounges, meeting spaces, outdoor terraces and food and beverage clusters as quickly as they could to keep tenants interested. Some lower tier office buildings are either in the wrong location or are not designed to easily convert to housing. Therefore they must do all they can to make offices work, brokers say.“The number of offices that are primed for conversion is a very small segment of the market,” said Jessica Morin, director of U.S. office research at CBRE.“There’s definitely more leverage in the tenant’s hands in terms of rent and concessions than there was during the pandemic,” she said. “We’re seeing some of the strongest tenant improvement allowances and free rent than we have previously seen, in both growth and commodity product.”As for how prospective tenants should proceed, it depends. “You should never try to time the market,” Weiss, the CBRE senior economist, said. “Every user should make a decision based on what you need, both now and in the immediate or intermediate future. We do expect and are forecasting that the problems of the office market will [last] until the end of 2024, which in theory could lead you to say ‘Well, maybe I should wait.’ But in New York it could take up to if not more than a year between signing of an LOI [letter of intent] and finalizing a lease.”Jacob Rowden, national research manager at brokerage JLL (JLL), said the trend toward greater concession packages mostly borne by the landlord is one that predates the pandemic anyway.“For the past five years, we have seen this run-up for concessions packages, which are predominantly in the form of tenant improvements,” he said. “We’ve seen that grow quite a bit. It was really a way for landlords to elevate the exit cash flow on their real estate, so they were able to escalate the base rents by paying higher concessions. So, when they were selling the asset two years, three years, five years later, they had that elevated cash flow underwritten, but they had already made those capital improvements.”Rising interest rates changed the picture, making landlords less inclined to fund concessions and amenities, Rowden said.“Once that started to change, and interest rates were growing, there was a sense that [tenant improvements] would be under more pressure,” he said. “And we have seen that marginally decline over the past year and a half. But tenants have gotten so accustomed to these large buildout allowances, especially over the past three years during the pandemic. And now we’re in a very tenant-favorable environment.”Saludos. (click to show/hide)CitarWhat Office Space Costs Landlords and Tenants NowAdd in incentives and concessions, and it’s clear tenants in major markets are getting a deal on spaceDavid M. Levitt | 2024.01.16Chicago is one of the major markets where effective rents have declined since the pandemic.Photo: Beata Zawrzel/Nurphoto via Getty ImagesFor all the emphasis on remote or hybrid work, there remain employers intent on having workplaces in office buildings like the good old days pre-pandemic. And the numbers suggest that these landlords are willing to pay more to make that happen.Effective rent — what the tenant pays after incentives like free rent and concessions such as the landlord assuming the cost of fitting out the space — has declined 10 percent nationally since the first quarter of 2020. In the third quarter of 2023, it was $22.42 a square foot, compared with $24.84 back in 2020, according to CBRE (CBRE) Econometric Advisors.Among 12 markets for which CBRE provided statistics, the highest effective rent was in Manhattan, with an average of $38.90 a square foot, a dip of 20 percent compared with the first three months of 2020. The lowest was in Houston, at $11.33, an 18 percent decline. Los Angeles was at $25.90, an 11 percent decline. San Francisco was at $35.74, a 31 percent drop; Boston at $28.71, down 4 percent; and Miami at $37.07, up 21 percent from early 2020. (Miami has been an unusually hot office market of late.)Chicago was at $13.21, a 19 percent decline; Dallas at $12.61, a 11 percent decline; Fort Worth at $11.78, a 10 percent decline; San Antonio at $14.52, a 9 percent decline; and Austin at $25.81, a 5 percent decline. Atlanta was $17.01, a 10 percent decline. The figures included each market’s suburbs and not just its central business district. New York brokers emphasize the increasingly bifurcated market, one for state-of-the-art Class A product, which is seeing unprecedented demand, and another for the more commoditized B and C office space, where demand is soft and declining. It’s the phenomenon commonly called “flight to quality.”The pandemic “was a huge blow to the office market,” said Ruth Colp-Haber, president and CEO of Wharton Property Advisors, a boutique brokerage that specializes in tenant representation and subleases. Fast-forwarding to today, she said “There is a flight to quality. It is a tale of two cities.”“That hybrid element is enabling companies to reduce their footprints,” Colp-Haber said. “The idea is to find space that’s attractive, that’s fun for employees to go into, so that’s going to be in the better buildings, often with amenities. So some companies will be spending more on a per-square-foot basis but they’re getting less space.”You “always” see a flight to quality during a downturn, said Whitley Collins, CBRE’s global president for advisory and transactional services. “Most companies feel because of the pandemic and the way we work they can take 20 or 30 percent less space,” he said. “So they move into a nicer building. So, if you cut your space by 20 percent, you can increase your costs by 20 percent. You can pay more per square foot in rent, take extra [tenant incentives]. There are a lot of companies thinking about that.”In a December report, CBRE found that “lower tier buildings” — those in the B and C classes that have lower ceilings, a more limited array of amenities, and were built with the lower and middle markets in mind — had a slippage of 3.9 percent in effective rent in 2023, compared with a 1.2 percent loss for “upper tier” buildings. The year before, in 2022, lower tier buildings’ effective rent declined 2.4 percent, compared with a rise of 2.4 percent for upper tier buildings.Stefan Weiss, a senior economist with CBRE Econometric Advisors, said that effective rents tend to be lower than base rents because effective rents include the impacts of whatever landlords pay to cover concessions and amenities, plus periods of free rent meant as an inducement for tenants to sign long-term leases. They also account for savings that tenants receive when rent increases are deferred until later in the lease.“In a challenging market, landlords typically keep their base, or asking, rent firm as long as they can in exchange for more concessions to tenants,” CBRE researchers wrote in the December report.Landlords are currently eager to give concessions to tenants, brokers say. They’re also eager to show banks the asking rents to become eligible for bigger loans.Last year nationwide, concessions in the top tier hit $98.05 a square foot, and $85.99 for the lower tier, according to CBRE. Both are recent highs. A CBRE spokeswoman said in an email that “it’s widely known” that tenant improvement costs — which are typically shared between landlord and tenant, but that have been trending toward burdening landlords more — are at a record high, considering the rising costs of materials and inflation.And, in a Jan. 8 report from Moody’s Analytics, effective rents nationwide were down the last two quarters — the most recent, the fourth quarter of 2023, by 0.3 percent — after eight consecutive quarters of rising effective rents. The research firm blamed “considerably high vacancies.”What seems to be happening is that landlords, spooked by rising vacancy rates and what had been rising interest rates, were building in lounges, meeting spaces, outdoor terraces and food and beverage clusters as quickly as they could to keep tenants interested. Some lower tier office buildings are either in the wrong location or are not designed to easily convert to housing. Therefore they must do all they can to make offices work, brokers say.“The number of offices that are primed for conversion is a very small segment of the market,” said Jessica Morin, director of U.S. office research at CBRE.“There’s definitely more leverage in the tenant’s hands in terms of rent and concessions than there was during the pandemic,” she said. “We’re seeing some of the strongest tenant improvement allowances and free rent than we have previously seen, in both growth and commodity product.”As for how prospective tenants should proceed, it depends. “You should never try to time the market,” Weiss, the CBRE senior economist, said. “Every user should make a decision based on what you need, both now and in the immediate or intermediate future. We do expect and are forecasting that the problems of the office market will [last] until the end of 2024, which in theory could lead you to say ‘Well, maybe I should wait.’ But in New York it could take up to if not more than a year between signing of an LOI [letter of intent] and finalizing a lease.”Jacob Rowden, national research manager at brokerage JLL (JLL), said the trend toward greater concession packages mostly borne by the landlord is one that predates the pandemic anyway.“For the past five years, we have seen this run-up for concessions packages, which are predominantly in the form of tenant improvements,” he said. “We’ve seen that grow quite a bit. It was really a way for landlords to elevate the exit cash flow on their real estate, so they were able to escalate the base rents by paying higher concessions. So, when they were selling the asset two years, three years, five years later, they had that elevated cash flow underwritten, but they had already made those capital improvements.”Rising interest rates changed the picture, making landlords less inclined to fund concessions and amenities, Rowden said.“Once that started to change, and interest rates were growing, there was a sense that [tenant improvements] would be under more pressure,” he said. “And we have seen that marginally decline over the past year and a half. But tenants have gotten so accustomed to these large buildout allowances, especially over the past three years during the pandemic. And now we’re in a very tenant-favorable environment.”Saludos.
Why Warner Bros., Facebook, Equinox want to be your office landlordLois Weiss | Jan. 19, 2024The world is an oyster for office sublease renters with some 20 million square feet on the market and landlords who are eager to make deals.NY Post photo compositeNew York’s commercial market is being crushed under the weight of 20 million square feet of available office subleases. Until that space is absorbed by new tenants, the market can’t move forward, according to Ruth Colp-Haber of Wharton Property Advisors, who specializes in these deals.“It’s a predictor of the market,” she said, noting that sublease rents are generally 25% lower than the cost of leasing directly from the building owner. “They will undercut the direct leases and it’s very difficult for the owners. Many can’t and won’t compete with the subleases.”And as expected, tenants are wasting no time to capitalize on their leverage.“We are seeing well-located, nicely built-out subleases move quickly, especially in Soho,” said Adam Henick of Current Real Estate Advisors. Manhattan subleases cost 25% less than a direct deal.Getty Images/iStockphotoSubleases can be offered by both large and small companies that are either moving elsewhere sooner than they thought or simply needing to shrink their footprint. Those in advertising bulk up their headcounts when they win a major client, but also shrink their footage when they lose them. The pandemic has also affected occupancy as some companies found they were able to maintain their businesses while working from home and now don’t need all their original square feet.As business needs change, companies may also pick up options on contiguous floors to ensure they control the space for their future growth, but then sublease out those spaces while waiting to catch up. “If you have 5,000 square feet for three years you can lease it, but if you have 50,000 square feet for a couple of years, that is a problem,” said Peter Turchin of CBRE. One of the most challenged parts of the city is Hudson Yards, where a whopping 2 million square feet of subleases are available. Companies like Warner Bros., Facebook, Equinox, Guardian Life and Pfizer at the Spiral at 66 Hudson Blvd. all have subleases on the market for both raw and furnished offices.“They are all high-quality spaces with high-quality sub-landlords providing a full-work letter and a full free-rent package and a discounted rent,” said Gabe Marans of Savills about those spots.An 89,000-square-foot sublease on the top three floors of 55 Hudson Yards has hit the market asking $165 per foot.©2022 Francis Dzikowski/OTTOBut even in this challenged market, quality doesn’t always come cheap. In October, Dan Loeb’s Third Point, put 89,000 square feet on the top three floors of 55 Hudson Yards up for sublease through July 2029 at an asking rent of $165 per foot.“We know of several tenants looking closely at the subleases at Hudson Yards,” said Jeffrey Peck of Savills. “Cash is king and having good credit is everything. If you have a creditworthy tenant, the landlord is rolling out the red carpet.”Meanwhile, Google is also offering pricey sublease space in Hudson Square since its new home opened at 550 Washington St. But other subleases are cheaper. In a recent deal near Madison Square Park, Instacart has subleased 21,000 square feet at 50 W. 23rd St. from an event platform, Bizzabo, which will remain in 10,000 square feet. There are only a few years left on the lease, but it gives both companies time to figure out their path forward. Market rents in Chelsea are now in the $80s per foot.Another bargain is from Paperless Post at 115 Broadway — aka 2 Trinity Centre — where 20,907 square feet is available for sublease for $35 per foot, according to Colp-Haber. Material Plus at 432 Park Ave. South is offering 9,800 square feet at an even cheaper rent in the mid-$30s per foot. As good as subleases can be for certain companies, there are downsides, and many tenants will avoid subleases that have just a few years remaining.Nevertheless, Michael Cohen of Williams Equities observed that even subleases with terms less than three years can provide opportunities for tenants as they become “fair game for a three-way deal.”In this manner, Cohen said, the building owner avoids a vacancy, and the original tenant is off the hook while the subtenant enjoys a new direct lease that is in part subsidized by the existing tenant.Ad giant Publicis Groupe has a 400,000-square-foot sublease at 1675 Broadway (right). It’s the best deal in the city, says CBRE’s John Maher.RudinThis past summer, a 400,000-square-foot sublease from Publicis Groupe at 1675 Broadway — an 800,000-square-foot Rudin building — was taken off the market for a few months, as the advertising giant was weighing its options. “It’s the nicest, lowest-cost sublease option in Manhattan with a great landlord and sub-landlord,” said CBRE’s John Maher, who leads the rental team. Several other tenants in the building are attorneys, including the law firm Davis+Gilbert, which added a floor in November to expand to 98,124 square feet. A big sublease from Publicis covers 132,000 square feet in the tower with a spectacular three-story atrium; around 90,000 square feet in the mid-rise and 188,000 square feet in the base. The term ends in May of 2031.“Everybody has to compete with very nice spaces for sublease,” said Marans of the landlord’s plight.
CitarWhat Office Space Costs Landlords and Tenants NowAdd in incentives and concessions, and it’s clear tenants in major markets are getting a deal on spaceDavid M. Levitt | 2024.01.16Chicago is one of the major markets where effective rents have declined since the pandemic.Photo: Beata Zawrzel/Nurphoto via Getty ImagesFor all the emphasis on remote or hybrid work, there remain employers intent on having workplaces in office buildings like the good old days pre-pandemic. And the numbers suggest that these landlords are willing to pay more to make that happen.Effective rent — what the tenant pays after incentives like free rent and concessions such as the landlord assuming the cost of fitting out the space — has declined 10 percent nationally since the first quarter of 2020. In the third quarter of 2023, it was $22.42 a square foot, compared with $24.84 back in 2020, according to CBRE (CBRE) Econometric Advisors.Among 12 markets for which CBRE provided statistics, the highest effective rent was in Manhattan, with an average of $38.90 a square foot, a dip of 20 percent compared with the first three months of 2020. The lowest was in Houston, at $11.33, an 18 percent decline. Los Angeles was at $25.90, an 11 percent decline. San Francisco was at $35.74, a 31 percent drop; Boston at $28.71, down 4 percent; and Miami at $37.07, up 21 percent from early 2020. (Miami has been an unusually hot office market of late.)Chicago was at $13.21, a 19 percent decline; Dallas at $12.61, a 11 percent decline; Fort Worth at $11.78, a 10 percent decline; San Antonio at $14.52, a 9 percent decline; and Austin at $25.81, a 5 percent decline. Atlanta was $17.01, a 10 percent decline. The figures included each market’s suburbs and not just its central business district. New York brokers emphasize the increasingly bifurcated market, one for state-of-the-art Class A product, which is seeing unprecedented demand, and another for the more commoditized B and C office space, where demand is soft and declining. It’s the phenomenon commonly called “flight to quality.”The pandemic “was a huge blow to the office market,” said Ruth Colp-Haber, president and CEO of Wharton Property Advisors, a boutique brokerage that specializes in tenant representation and subleases. Fast-forwarding to today, she said “There is a flight to quality. It is a tale of two cities.”“That hybrid element is enabling companies to reduce their footprints,” Colp-Haber said. “The idea is to find space that’s attractive, that’s fun for employees to go into, so that’s going to be in the better buildings, often with amenities. So some companies will be spending more on a per-square-foot basis but they’re getting less space.”You “always” see a flight to quality during a downturn, said Whitley Collins, CBRE’s global president for advisory and transactional services. “Most companies feel because of the pandemic and the way we work they can take 20 or 30 percent less space,” he said. “So they move into a nicer building. So, if you cut your space by 20 percent, you can increase your costs by 20 percent. You can pay more per square foot in rent, take extra [tenant incentives]. There are a lot of companies thinking about that.”In a December report, CBRE found that “lower tier buildings” — those in the B and C classes that have lower ceilings, a more limited array of amenities, and were built with the lower and middle markets in mind — had a slippage of 3.9 percent in effective rent in 2023, compared with a 1.2 percent loss for “upper tier” buildings. The year before, in 2022, lower tier buildings’ effective rent declined 2.4 percent, compared with a rise of 2.4 percent for upper tier buildings.Stefan Weiss, a senior economist with CBRE Econometric Advisors, said that effective rents tend to be lower than base rents because effective rents include the impacts of whatever landlords pay to cover concessions and amenities, plus periods of free rent meant as an inducement for tenants to sign long-term leases. They also account for savings that tenants receive when rent increases are deferred until later in the lease.“In a challenging market, landlords typically keep their base, or asking, rent firm as long as they can in exchange for more concessions to tenants,” CBRE researchers wrote in the December report.Landlords are currently eager to give concessions to tenants, brokers say. They’re also eager to show banks the asking rents to become eligible for bigger loans.Last year nationwide, concessions in the top tier hit $98.05 a square foot, and $85.99 for the lower tier, according to CBRE. Both are recent highs. A CBRE spokeswoman said in an email that “it’s widely known” that tenant improvement costs — which are typically shared between landlord and tenant, but that have been trending toward burdening landlords more — are at a record high, considering the rising costs of materials and inflation.And, in a Jan. 8 report from Moody’s Analytics, effective rents nationwide were down the last two quarters — the most recent, the fourth quarter of 2023, by 0.3 percent — after eight consecutive quarters of rising effective rents. The research firm blamed “considerably high vacancies.”What seems to be happening is that landlords, spooked by rising vacancy rates and what had been rising interest rates, were building in lounges, meeting spaces, outdoor terraces and food and beverage clusters as quickly as they could to keep tenants interested. Some lower tier office buildings are either in the wrong location or are not designed to easily convert to housing. Therefore they must do all they can to make offices work, brokers say.“The number of offices that are primed for conversion is a very small segment of the market,” said Jessica Morin, director of U.S. office research at CBRE.“There’s definitely more leverage in the tenant’s hands in terms of rent and concessions than there was during the pandemic,” she said. “We’re seeing some of the strongest tenant improvement allowances and free rent than we have previously seen, in both growth and commodity product.”As for how prospective tenants should proceed, it depends. “You should never try to time the market,” Weiss, the CBRE senior economist, said. “Every user should make a decision based on what you need, both now and in the immediate or intermediate future. We do expect and are forecasting that the problems of the office market will [last] until the end of 2024, which in theory could lead you to say ‘Well, maybe I should wait.’ But in New York it could take up to if not more than a year between signing of an LOI [letter of intent] and finalizing a lease.”Jacob Rowden, national research manager at brokerage JLL (JLL), said the trend toward greater concession packages mostly borne by the landlord is one that predates the pandemic anyway.“For the past five years, we have seen this run-up for concessions packages, which are predominantly in the form of tenant improvements,” he said. “We’ve seen that grow quite a bit. It was really a way for landlords to elevate the exit cash flow on their real estate, so they were able to escalate the base rents by paying higher concessions. So, when they were selling the asset two years, three years, five years later, they had that elevated cash flow underwritten, but they had already made those capital improvements.”Rising interest rates changed the picture, making landlords less inclined to fund concessions and amenities, Rowden said.“Once that started to change, and interest rates were growing, there was a sense that [tenant improvements] would be under more pressure,” he said. “And we have seen that marginally decline over the past year and a half. But tenants have gotten so accustomed to these large buildout allowances, especially over the past three years during the pandemic. And now we’re in a very tenant-favorable environment.”Saludos.
What Office Space Costs Landlords and Tenants NowAdd in incentives and concessions, and it’s clear tenants in major markets are getting a deal on spaceDavid M. Levitt | 2024.01.16Chicago is one of the major markets where effective rents have declined since the pandemic.Photo: Beata Zawrzel/Nurphoto via Getty ImagesFor all the emphasis on remote or hybrid work, there remain employers intent on having workplaces in office buildings like the good old days pre-pandemic. And the numbers suggest that these landlords are willing to pay more to make that happen.Effective rent — what the tenant pays after incentives like free rent and concessions such as the landlord assuming the cost of fitting out the space — has declined 10 percent nationally since the first quarter of 2020. In the third quarter of 2023, it was $22.42 a square foot, compared with $24.84 back in 2020, according to CBRE (CBRE) Econometric Advisors.Among 12 markets for which CBRE provided statistics, the highest effective rent was in Manhattan, with an average of $38.90 a square foot, a dip of 20 percent compared with the first three months of 2020. The lowest was in Houston, at $11.33, an 18 percent decline. Los Angeles was at $25.90, an 11 percent decline. San Francisco was at $35.74, a 31 percent drop; Boston at $28.71, down 4 percent; and Miami at $37.07, up 21 percent from early 2020. (Miami has been an unusually hot office market of late.)Chicago was at $13.21, a 19 percent decline; Dallas at $12.61, a 11 percent decline; Fort Worth at $11.78, a 10 percent decline; San Antonio at $14.52, a 9 percent decline; and Austin at $25.81, a 5 percent decline. Atlanta was $17.01, a 10 percent decline. The figures included each market’s suburbs and not just its central business district. New York brokers emphasize the increasingly bifurcated market, one for state-of-the-art Class A product, which is seeing unprecedented demand, and another for the more commoditized B and C office space, where demand is soft and declining. It’s the phenomenon commonly called “flight to quality.”The pandemic “was a huge blow to the office market,” said Ruth Colp-Haber, president and CEO of Wharton Property Advisors, a boutique brokerage that specializes in tenant representation and subleases. Fast-forwarding to today, she said “There is a flight to quality. It is a tale of two cities.”“That hybrid element is enabling companies to reduce their footprints,” Colp-Haber said. “The idea is to find space that’s attractive, that’s fun for employees to go into, so that’s going to be in the better buildings, often with amenities. So some companies will be spending more on a per-square-foot basis but they’re getting less space.”You “always” see a flight to quality during a downturn, said Whitley Collins, CBRE’s global president for advisory and transactional services. “Most companies feel because of the pandemic and the way we work they can take 20 or 30 percent less space,” he said. “So they move into a nicer building. So, if you cut your space by 20 percent, you can increase your costs by 20 percent. You can pay more per square foot in rent, take extra [tenant incentives]. There are a lot of companies thinking about that.”In a December report, CBRE found that “lower tier buildings” — those in the B and C classes that have lower ceilings, a more limited array of amenities, and were built with the lower and middle markets in mind — had a slippage of 3.9 percent in effective rent in 2023, compared with a 1.2 percent loss for “upper tier” buildings. The year before, in 2022, lower tier buildings’ effective rent declined 2.4 percent, compared with a rise of 2.4 percent for upper tier buildings.Stefan Weiss, a senior economist with CBRE Econometric Advisors, said that effective rents tend to be lower than base rents because effective rents include the impacts of whatever landlords pay to cover concessions and amenities, plus periods of free rent meant as an inducement for tenants to sign long-term leases. They also account for savings that tenants receive when rent increases are deferred until later in the lease.“In a challenging market, landlords typically keep their base, or asking, rent firm as long as they can in exchange for more concessions to tenants,” CBRE researchers wrote in the December report.Landlords are currently eager to give concessions to tenants, brokers say. They’re also eager to show banks the asking rents to become eligible for bigger loans.Last year nationwide, concessions in the top tier hit $98.05 a square foot, and $85.99 for the lower tier, according to CBRE. Both are recent highs. A CBRE spokeswoman said in an email that “it’s widely known” that tenant improvement costs — which are typically shared between landlord and tenant, but that have been trending toward burdening landlords more — are at a record high, considering the rising costs of materials and inflation.And, in a Jan. 8 report from Moody’s Analytics, effective rents nationwide were down the last two quarters — the most recent, the fourth quarter of 2023, by 0.3 percent — after eight consecutive quarters of rising effective rents. The research firm blamed “considerably high vacancies.”What seems to be happening is that landlords, spooked by rising vacancy rates and what had been rising interest rates, were building in lounges, meeting spaces, outdoor terraces and food and beverage clusters as quickly as they could to keep tenants interested. Some lower tier office buildings are either in the wrong location or are not designed to easily convert to housing. Therefore they must do all they can to make offices work, brokers say.“The number of offices that are primed for conversion is a very small segment of the market,” said Jessica Morin, director of U.S. office research at CBRE.“There’s definitely more leverage in the tenant’s hands in terms of rent and concessions than there was during the pandemic,” she said. “We’re seeing some of the strongest tenant improvement allowances and free rent than we have previously seen, in both growth and commodity product.”As for how prospective tenants should proceed, it depends. “You should never try to time the market,” Weiss, the CBRE senior economist, said. “Every user should make a decision based on what you need, both now and in the immediate or intermediate future. We do expect and are forecasting that the problems of the office market will [last] until the end of 2024, which in theory could lead you to say ‘Well, maybe I should wait.’ But in New York it could take up to if not more than a year between signing of an LOI [letter of intent] and finalizing a lease.”Jacob Rowden, national research manager at brokerage JLL (JLL), said the trend toward greater concession packages mostly borne by the landlord is one that predates the pandemic anyway.“For the past five years, we have seen this run-up for concessions packages, which are predominantly in the form of tenant improvements,” he said. “We’ve seen that grow quite a bit. It was really a way for landlords to elevate the exit cash flow on their real estate, so they were able to escalate the base rents by paying higher concessions. So, when they were selling the asset two years, three years, five years later, they had that elevated cash flow underwritten, but they had already made those capital improvements.”Rising interest rates changed the picture, making landlords less inclined to fund concessions and amenities, Rowden said.“Once that started to change, and interest rates were growing, there was a sense that [tenant improvements] would be under more pressure,” he said. “And we have seen that marginally decline over the past year and a half. But tenants have gotten so accustomed to these large buildout allowances, especially over the past three years during the pandemic. And now we’re in a very tenant-favorable environment.”
...estamos ante un final de ciclo de alcance civilizatorio
"and over one hundred cutting edge spechandgekatraammachines to help detect and stop fentanyl comungin suis our southwest border."
Voy a contar una anécdota que resume, muy bien, el momento actual. Esta mañana, con un familiar, ha salido a colación lo de los viajes del Imserso. Ese familiar está jubilado. Pues bien, uno de sus mejores amigos, médico jubilado, al igual que su mujer, con sus dos hijos bien colocados, se iban de viaje del Imserso al norte, creo que 15 días. Acto seguido le he comentado que me parece poco ético que con su nivel de renta puedan disfrutar de 15 días a escote de todos, y la respuesta ha sido violenta, como dando a entender que reacciono por envidia y que no entiendo que son viejos y que para eso han cotizado. Esta misma conversación, con el mismo familiar, la tuve hace ya unos años, y pensaba igual que yo. El conflicto generacional está muy interiorizado, y tristemente ven el problema como una impugnación generacional de la cuál no se quiere ceder nada, y eso es porque ya se empieza a tener una percepción de que las cosas no van tan bien. Si con algo tan inocente como unos viajes al Imserso la conversación ha sido así de tensa, cuando de verdad se cuestione el precio del banano y el importe de las actuales pensiones o el copago por determinados servicios, que puede que lleguen más pronto que tarde porque NHD, el clima va a ser irrespirable. Cada vez tengo más claro que si los que forman la opinión de las masas no empiezan a prepararnos para lo que viene, coincido con lo que planteaba tomasjos, y es que estamos ante un final de ciclo de alcance civilizatorio. Intento no sacar el tema del banano porque es un tema sensible, pero no he sido consciente de que en determinadas cuestiones, la opinión puede generar semejante conflicto. No, no es bonito lo que viene.
TRABAJAR, TENER HIJOS, MORIRLos jóvenes españoles lo hacen todo cuatro años después que sus padres: "Llegas tarde a todo"Entre 1992 y 2022, la edad del primer hijo ha aumentado cuatro años; la emancipación, al menos dos; la del matrimonio, siete; y se empieza a trabajar más tarde. Es "insostenible"Cuando Eduardo y Rocío tuvieron a su primera hija a los 32 años, en 2000, ya se consideraban padres tardíos. Hoy, un par décadas más tarde, tal vez habrían sido los primeros de su grupo de amigos en inaugurar la paternidad, como sugiere la propia Rocío, trabajadora en banca: "Mis compañeros están teniéndolos a los 36". El retraso en la paternidad es el signo más claro de que lo hacemos todo más tarde, que la juventud se ha alargado y que eso está teniendo efectos en la economía, la sociedad e incluso la política.Hoy, ambos tienen 56 años y dos hijos: Héctor, de 21, y Azucena, de 23, con los que viven en el centro de Madrid. Tienen claro que ellos lo harán todo mucho más tarde. En parte, obligados por motivos económicos que retrasan su independencia. Pero también porque los hábitos de vida han cambiado: "Me fastidia cuando demonizan a los jóvenes: también estudian mucho, trabajan, se forman", responde Eduardo. "Quieren vivir bien, pero creo que tienen un sentimiento de la buena vida aristotélica: vivir una vida que merezca la pena ser vivida. No me parece egoísta".¿Cuánto más tardamos en hacer las cosas que en 1992, cuando Eduardo y Rocío tenían 25? Alrededor de cuatro años. Es lo que ha aumentado la edad media a la que las mujeres tienen su primer hijo, de los 27,5 años a los 31,57, el principal indicador temporal en la vida de una persona. Tanto hombres como mujeres se emancipan dos años más tarde, y en otras condiciones. La edad a la que nos casamos ha aumentado mucho más, unos siete años. La buena noticia es que la esperanza de vida también se ha disparado en unos seis años desde principios de los noventa.Eso ha provocado la sensación entre muchos jóvenes de llegar tarde a todo, de que los hitos vitales que deberían ir cumpliendo se retrasan. Un salto de cuatro años en apenas una generación es una brecha gigantesca "insostenible", como señala Alberto del Rey, catedrático de Sociología y Comunicación de la Universidad de Salamanca. "Si trabajas con valores medios, ya solo un año de retraso es una auténtica barbaridad". Para el demógrafo, la clave se encuentra en la emancipación, que ya era tardía a principios de los 90 por el modelo familiar español, y cuyo retraso está relacionado con el desplome de la natalidad española. (...)
Rescate a la banca: ¿puede volver a suceder?El sector financiero está hoy mucho mejor preparado. Si surge una crisis no sería tanto del crédito privado como de la renta fija privadaEl mundo cambió con la crisis de Lehman Brothers. De ese evento único en la historia financiera, aprendimos, como mínimo, dos cosas. La primera es que un banco de la máxima calificación crediticia puede quebrar sin recibir la ayuda de su banco central; cuestión distinta es saber si la decisión de la Reserva Federal fue correcta o no, pero cambió la manera de entender cómo funciona el sistema financiero. La segunda lección es que los ratios de solvencia y de liquidez de un banco no garantizan en absoluto que el sistema no pueda sufrir una crisis aguda y casi instantánea. En España sabemos de esto: las crisis de Caja Castilla La Mancha, Caixa Catalunya, Bankia, Banco Popular… y otras se produjeron en días, no en semanas, desde que los mercados empezaron a tensionarse.La crisis de Lehman pinchó la burbuja inmobiliaria a ambos lados del Atlántico y la crisis griega puso en cuestión un modelo de endeudamiento aplicado por muchos países europeos que no es sostenible y, por ende, puso en cuestión al propio euro. España aguantó mucho, se ponderó la fortaleza de los ratios de las entidades financieras, incluso nuestro país contribuyó con fondos al rescate griego, pero finalmente las crisis de las cajas puso el foco en la necesidad de restructuración del sector. El problema de gobernanza de las cajas era evidente, sus consejeros, elegidos entre partidos políticos y sindicatos en su inmensa mayoría, tomaban en ocasiones decisiones crediticias absolutamente incomprensibles. Su cartera crediticia tenía ladrillo y préstamo promotor por todos los lados y a lo largo de 4 años (2008-2012) se hizo evidente que algo se estaba fraguando y no era bueno.Para complicar más las cosas, desde el ministerio de economía se presionaba para que las cajas más pequeñas se agruparan en entidades más grandes, como si juntar problemas de cajas regionales o provinciales en una entidad más grande con iguales o superiores problemas fuera a solventar algo… y llegó Bankia, y el resto es historia.La gran duda es si esto podría volver a pasar, y claro, esto tiene dos respuestas. La respuesta corta es que sí, nuestra capacidad como seres humanos de repetir errores cometidos en el pasado es casi infinita. Una mala gestión de la cartera crediticia, ya sea hipotecaria o de otro tipo, en un momento de boom económico, combinada con una mala gobernanza, nos llevaría a una situación similar… puede pasar, sí.La respuesta larga implica explicar en qué estamos mejor y en qué estamos peor que en 2012 cuando se produjo el rescate a la banca. En primer lugar, las cajas como tales casi han desaparecido al convertirse en bancos y han alejado a los políticos de la toma de decisiones de gestión, lo cual es una buena noticia. Claro que el riesgo de una crisis no desaparece totalmente; el Banco Popular desapareció por una tardía apuesta de sus gestores, esta vez sí bancarios y no políticos, por potenciar negocios de riesgos frente a los tradicionales de la entidad.En segundo lugar, no hay que olvidarlo, la vertiginosa subida de los precios inmobiliarios de los 90 y principios de los 2000 se han repetido en los últimos años. De hecho, en muchas zonas de España los precios están de nuevo en máximos. Es cierto que el último tirón del mercado se ha producido con los ahorros forzosos de la pandemia, lo cual no deja de ser positivo al reducir el riesgo por el menor apalancamiento.Otra cosa que ha cambiado es el peso de la financiación hipotecaria variable, que antes de la crisis del 2008 era apabullante, casi único. En eso, los particulares han dado muestras de haber aprendido la lección y ahora las tasas fijas dominan en la mayor parte de la financiación de compra de vivienda.Se puede afirmar que el sector privado ha aprendido cosas. Se ha desapalancado, pero una diferencia del actual ciclo es la enorme deuda pública y la permisividad manifiesta de la Unión Europea con respecto al mantenimiento de fuertes déficits en muchos países de la zona euro. Esto supone un enorme reto para la sociedad en su conjunto y para las entidades financieras en particular, poseedoras de entre el 25% y el 30% del total de la deuda pública. En este ciclo, la crisis bancaria podría venir no tanto del crédito privado, como de la renta fija privada.Sin duda, el sector financiero está más preparado para la crisis. En primer lugar, ha adelgazado su tamaño, su red, su plantilla… reforzando su solvencia y con una gestión más eficiente. No hay más que ver la comparativa de las pruebas de estrés de los bancos españoles con sus pares europeos. Siempre hay un buen número de bancos entre los más solventes de nuestro entorno; pero no nos confiemos, el Banco Popular se ponía de ejemplo de buena gestión hasta muy poco antes de su caída.En conclusión, hay eventos que podrían provocar una crisis financiera similar a la de 2008, más probable por una posible crisis de la deuda pública que por un excesivo otorgamiento de crédito, pero no parece probable que la crisis llegue a ser tan grave como para llevarse por delante todo el sistema y forzar un rescate.Dicho todo esto, no hay que confiarse. El endeudamiento público, el déficit perenne, la volatilidad de los precios inmobiliarios y de las tasas de interés podría potencialmente provocar una crisis. Estamos más preparados, pero la historia tiene una tendencia a repetirse más pronto que tarde que debe obligarnos a no bajar la guardia.
Evergrande Faces Renewed Liquidation Risk in Wind-Up HearingUncertainty over status of petitioners before Monday sessionWind-up of developer would exacerbate China’s housing crisisBy Pearl Liu28 de enero de 2024 at 0:00 CETChina Evergrande Group will once again try to fend off liquidation at court hearings in Hong Kong on Monday.Eight weeks after the debt-laden property developer won a surprise reprieve in the long-running lawsuit, Evergrande has made little progress toward clinching a restructuring agreement with creditors.Any order to wind up Evergrande, which has about $327 billion in liabilities, will likely send ripples through China’s financial system at a time when policymakers are trying to stem a stock market rout. It would also further weaken confidence in the housing industry, which is in a persistent slump that’s dragging on the world’s second-largest economy.In addition to the case scheduled to be heard at 9:30 a.m., Judge Linda Chan will conduct a rare hearing on a possible “regulating order” at 2:30 p.m., according to information on the city’s judiciary website. Such orders mean the court would regulate the winding-up process, potentially including appointing a liquidator.China has been releasing new measures to shore up the struggling property sector, including drafting a list of builders that would be eligible for funding support. But there is little indication that Evergrande has benefited at all, more than two years after its default.In the absence of any last-minute deal with bondholders, Evergrande’s fate may rest on the status of the parties seeking a winding-up order from the court.The December hearing was adjourned after the original petitioner, Top Shine Global Limited of Intershore Consult (Samoa) Ltd., decided not to push for an immediate liquidation. Now a key bondholder group plans to join the petition, Reuters reported on Jan. 24, citing people familiar with the matter. (...)
Cita de: Zugzwang en Enero 28, 2024, 01:27:32 amVoy a contar una anécdota que resume, muy bien, el momento actual. Esta mañana, con un familiar, ha salido a colación lo de los viajes del Imserso. Ese familiar está jubilado. Pues bien, uno de sus mejores amigos, médico jubilado, al igual que su mujer, con sus dos hijos bien colocados, se iban de viaje del Imserso al norte, creo que 15 días. Acto seguido le he comentado que me parece poco ético que con su nivel de renta puedan disfrutar de 15 días a escote de todos, y la respuesta ha sido violenta, como dando a entender que reacciono por envidia y que no entiendo que son viejos y que para eso han cotizado. Esta misma conversación, con el mismo familiar, la tuve hace ya unos años, y pensaba igual que yo. El conflicto generacional está muy interiorizado, y tristemente ven el problema como una impugnación generacional de la cuál no se quiere ceder nada, y eso es porque ya se empieza a tener una percepción de que las cosas no van tan bien. Si con algo tan inocente como unos viajes al Imserso la conversación ha sido así de tensa, cuando de verdad se cuestione el precio del banano y el importe de las actuales pensiones o el copago por determinados servicios, que puede que lleguen más pronto que tarde porque NHD, el clima va a ser irrespirable. Cada vez tengo más claro que si los que forman la opinión de las masas no empiezan a prepararnos para lo que viene, coincido con lo que planteaba tomasjos, y es que estamos ante un final de ciclo de alcance civilizatorio. Intento no sacar el tema del banano porque es un tema sensible, pero no he sido consciente de que en determinadas cuestiones, la opinión puede generar semejante conflicto. No, no es bonito lo que viene.Siempre he visto la falta de conciencia social de España como un problema que acarrea gran parte de los males que sufre. De ahí la poca empatía que siente un jubilado por el resto de personas. Entiende el sistema como suma cero y si le quitas a él, es para dárselo a otro, y como no, eso es injusto porque se lo ha ganado.El piso es más de lo mismo. No entienden el daño que provoca al resto, porque no tienen unos valores sociales, estanos muy lejos de Dinamarca.Todos esperan su chiringuito, les importa un bledo el resto de personas.Saludos
Siempre he visto la falta de conciencia social de España como un problema que acarrea gran parte de los males que sufre. De ahí la poca empatía que siente un jubilado por el resto de personas. Entiende el sistema como suma cero y si le quitas a él, es para dárselo a otro, y como no, eso es injusto porque se lo ha ganado.El piso es más de lo mismo. No entienden el daño que provoca al resto, porque no tienen unos valores sociales, estanos muy lejos de Dinamarca.Todos esperan su chiringuito, les importa un bledo el resto de personas.Saludos
Por cierto, Menéame lleva fino un tiempo con las noticias sobre el pisito y los problemas de los jóvenes para acceder al alquiler.No sé si hay comentarios que son simples troleos, o realmente son caseros caraduras repitiendo mantras. El caso es que, efectivamente, vivir de la gorra y del pisito son las nuevas oposiciones y funcionariado. Lo malo de esto, una vez más, es que o hay agallas desde los mandos para cortarlo, o caerá por su propio peso pero arrasando con todo por el camino.Hasta que el sextercio ya no valer nada.
Para que nos hagamos una idea, yo he llegado a escuchar durante la crisis de 2008, a gente bien preparada, decir que porque no se quitaba el 25 por ciento de los ahorros a los ahorradores para dárselo a los hipotecados y pudieran pagar los pisos. Ese es el nivel.