LEASE AGREEMENT REFERENCE GUIDE 1410: NAILING DOWN SPACE FOR MAJOR OFFICE USERS IN TIGHTENING MARKETS $49.95
Nailing Down Space for Major Office Users in Tightening Markets
This LARG looks at what happens when the market for suburban and downtown office space tightens up, and how it changes the leasing landscape. It analyses three traditional devices the major tenant can use to control large blocks of space during negotiations to minimize its chances of losing the deal to another tenant. The Lease Clause Critique contains extended excerpts from those pro-tenant pre-execution devices—an Option to Lease, a Letter of Intent, and an Exclusive Negotiating Agreement.
TENANT STRATEGIES FOR TIGHTER MARKETS AND BIG BLOCKS OF SPACE
When real estate leasing markets tighten up, it gets harder for tenants to find and nail down big blocks of space, especially in premier buildings. Flash back to what happened in Houston in the late 1990’s, and what C&W was saying about it. “Large blocks of contiguous class A office space 50,000 feet or larger are becoming scarce, and Landlords who have them may have several prospects looking at the same block,” said a leasing broker from Cushman and Wakefield of Texas. “Tenants who don’t develop a thorough real estate strategy in the beginning that includes back-ups and alternatives could lose significant time and upfront costs when they don’t get the space.”
According to C&W’s tenant representation specialists, the tightening market in Houston changed the way landlords with desirable large blocks of office space did business. In tight markets, the following techniques become common: