The Dallas office market is a landlord's. The demand for quality office space is at record levels. An office tenant looking for a perfect location needs to take action and have representation to find the right office space.
Dallas area office vacancy rates are low in almost every submarket. The lack of options has increased the difficulty for tenants to negotiate aggressive deals. It is also making it harder for Dallas office tenants to have backup locations in the negotiation process.
Landlords have the advantage of receiving multiple offers for the same office space. Competition among tenants in some markets is fierce. Landlords will choose the most financially beneficial tenant for space. If you are a new company, a company with damaged credit or the competing company has better financials you could lose out to a financially stronger business.
The worst situation is to be a tenant that is ready to sign the lease after months of negotiation and lose the space because another tenant is more appealing to the landlord. There are some ways you can still give yourself an advantage as a tenant in this competitive Dallas office space market.
Dallas Office Space Market Tactics:
Have Multiple Options: This is obvious but it is always good to have backup plans. With this tight office market, there are not as many as we once had but they are still available. Knowledge of the market is helpful to have numerous office space options.
Time Management: Once you decide to lease office space or renew your lease make a timeline for the process. Your tenant representative will do this for you but if you don't have one it is helpful to design one and hold yourself accountable.
Be Realistic: Everyone wants a good deal. There are still excellent opportunities available but be realistic regarding rental rates. Don't expect an $18 per square foot rate in a $28 per square foot market.
Speed: Don't procrastinate. Time isn't your friend in a landlords office market.
Communication: Don't make assumptions. It is important to be transparent with your tenant representative. He or she knows what leasing activity your landlord is experiencing and can position you to get into the best position but they must know what you are thinking.
Dallas Tenant Representation: Employ the services of a qualified Dallas office tenant representative to ensure that you are seeing all the office space options and you are on top of your competition.
Lease Renewal Option: If you have a lease renewal option understand the terms and the notification dates. This is a helpful tool that is defiantly advantageous for office tenants in a landlord's market.
Attorney: Decide who you will use for your legal counsel while you are looking at space. Don't lose your space because a better offer came into the landlord while you are looking for an attorney.
Letter of Intent: Negotiate language in the letter of intent (LOI) that both parties will stop negotiations with other parties once the LOI is executed.
Financials: Prepare copies of two years of cash flow statements and a current balance sheet prior to the selection of your office space. It is wise to position yourself to be able to deliver these documents promptly when asked by the landlord.
Use these tactics to place yourself in the best position to find and negotiate a good Dallas office space. For additional ideas that can help you negotiate and find an office we can help you. If you are looking to position your business in the most advantageous position and if you Dallas tenant representation contact us so we can show you how we can help you.