Retailers and Lower Rents

The United States Retail Sector showed signs of stability during the third quarter of 2010, according to information from REIS Inc. and notes from the Journal of Property Management of IREM. With a 10.9% vacancy rate at neighborhood and community centers and a positive net absorption of 300,000 square feet, the market still have opportunities for certain retailers who want to take advantage of lower rents and vacancies resulting from the recession by opening new stores and extending leases at favorable terms, according to data collected by CoStar Group. Mall have shown losses of 13.6% in rent while lifestyle centers showed 12.1%, according also to data collected by CoStar Group. These centers are most likely to be after those retailers businesses, looking for dcicounted rates. Kohls is one of the retailers taking advantage of lower rents to opoen new stores. It opened 30 stores in 2010 (21 in the third quarter) and plans to open 40 new stores in 2011. Many of the new stores will take over vacated space by Lowes and Wal-Mart. Electronic retailer HHGREGG also plans to take advanatage of market conditions opening new stores and his presence and expansion in South Florida is already a reality. Pittsburg based, Dick's Sporting Goods Inc. has similar plans.

The Flexibility of leasing office space

For many firms, renting office space might work out better than purchasing an office condominium unit. Thus, a company that is growing rapidly may require additional space every few years. This type of company might do better with short term leases or with a long term lease containing options to acquire additional space in the building at specified future dates. A condominium office building can be expected to have infrequent turnovers, and obtaining additional space may be difficult, although some condominiums use a right of first refusal requiring unit owners selling or leasing units to offer them to the other unit owners. An office tenant can move out at the end of the lease without worrying about disposing of the leased premises. The key is flexibility when you expect growth. In the Medical field, doctors and dentists do not usually experience the kind of growth that requires the same flexibility so in these cases an office condominium may work better, taking some advantages of ownership. The same is true for other professionals. Therefore the success of some professional office condominium projects. For these doctors or professionals owning may have better financial and/or tax advantages, making it a lot more attractive than leasing.