COULD THERE BE A SMALL WINDOW OF OPPORTUNITY FOR TENANTS IN A STILL-HEALTHY MARKET?
Are you planning a move or expansion in the near future? If so, you might just be in luck as current market dynamics may allow you to negotiate better deal terms than if you delay to 2018 or beyond. With pre-leasing activity lower than historical levels, and a lot of uncertainty around changes being made by the Trump administration, could this be a small window of opportunity for tenants in a still-healthy market?
With lower pre-leasing levels for new construction, the impact of the downturn in the energy sector and uncertainty around anticipated changes by the Trump administration, we expect rents to stabilize; at least in the short-term. This could mean there is a window of opportunity for tenants to negotiate more favorable rates and concessions.
While Denver remains a hot market, the amount of new buildings coming online is outpacing the demand by tenants for space. The energy sector, however, seems to be stabilizing. Since this sector represents approximately 25%-30% of downtown square footage, we expect increased demand for space by these companies in the next 12-24 months. With most other industries remaining strong, this could cause vacancy rates to decrease further which results in rent increases.
What this means for business owners and executives is that with the right Tenant Representation, you can use these market dynamics to maximize your negotiating leverage and achieve favorable lease terms.
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