Craig Trbovich Commercial Real Estate
Last week I wrote about 5 Ways to Increase the Value of Your Commercial Real Estate Investments. As a quick review, the 5 areas that you CAN control to some degree are rent, property condition, building use, expenses and tenant credit. Over the coming weeks I will expand each of these areas and offer some strategies to help you maximize the value of your investment real estate. We will begin with rent.
The key here is to know your market and be competitive. It is important to not be over- or under-priced. The worst thing that can happen to your investment’s value is vacancy. Less rent is often better than no rent. Everything is negotiable in a lease transaction, so remember to leave room for negotiating. If you have a broker for your property, that can be your source of invaluable market information. We are in the trenches every day and have knowledge about what rates leases are being done at, what tenants are currently in the market and what incentives are being offered to attract new tenants.
Here are a few key office market statistics for the Phoenix Metro Area. Vacancy and Time on Market are key indicators to understand because they get to the heart of the basic economic model of Supply (vacancy) and Demand (time on market). A keen understanding of the supply and demand in your sub-market can be very enlightening and helpful in determining the lease rates you can obtain for your properties.
|
Office Market |
Average Full Service Asking Rate |
Average Vacancy |
Average Time on Market (months) |
| Central Phoenix |
$20.76 |
30.6% |
29.6 |
| Scottsdale |
$22.53 |
29.9% |
27.5 |
| North/Northwest Phoenix |
$20.05 |
39.5% |
33.3 |
| West Valley |
$23.17 |
49.9% |
37.6 |
| East Valley |
$22.41 |
38.1% |
29.8 |
Source: December 2012 CoStar Analytics.
The above statistics cover a broad area and all classes of office space. For a no obligation analysis of your property, please call me at (408) 522-2799 and “TrboCharge” your investment real estate today.