Rather than focusing on where tenants will come from, CRE professionals are focusing on the increased demands of new tenants such as WiFi and food services and the challenges of accelerating development such as traffic issues and delays in construction permits, the survey shows.
Nearly 1,000 commercial real estate professionals nationwide participated in the survey. The respondent pool was drawn from the Black’s Guide online registered-user database which consists of more than 18,000 commercial real estate professionals – largely brokers, property managers and developers – in 19 markets the company serves around the country.
Other key themes on the current state of the CRE market that the survey cites include:
• On space requirements: 43 percent of respondents posited their average space requirement over the last 6 months as between 1,000-5,000 square feet.
• On term of a lease: The majority of respondents (55 percent) cited 3-5 years as the average term of a lease entered into in their market.
• On deal value: The majority of respondents (58 percent) noted their average leasing deal was worth up to $500,000 this year; 14 percent had average deals between $1 million-$5 million.
In all but three of the markets polled, ‘banking/finance’ ranked as the leading industry to have leased commercial space over the past 6 months.
The survey found that certain markets had a decidedly more optimistic industry outlook than others. Orlando is the most optimistic city of those surveyed: 51 percent of Orlando’s respondents anticipated their average current space requirement to ’increase’ in the coming 6 months. Denver had the second most positive outlook with 50 percent anticipating an ‘increase;’ in third place was Tampa, with 45 percent of respondents predicting an ‘increase.’ The two Florida cities both also cited an increase in average space requirements over the past 6 months.
According to the survey’s findings, WiFi was cited as the most popular amenity being requested by tenants today. Coming in at number two was food services; health clubs came in third. Some interesting amenities being asked for are: ‘24-7 air conditioning for computers’ (South Florida), ‘sustainable/green practices within the facility’ (New Jersey) and ‘high-end restaurants’ (Dallas).
Lack of parking topped the list nationwide as the biggest challenge to leasing commercial space today, but naturally certain markets differed on this question, pointing to the unique challenges that influence or afflict individual markets:
• The San Francisco and Michigan markets cited ‘excess inventory’ as their major obstacle; 67 percent and 75 percent, respectively.
• The Orlando and New Jersey markets noted ‘lack of inventory’ as their biggest challenge; 41 percent, and 31 percent, respectively.
• The Jacksonville, Fla., and New York City markets specified ‘creating product differentiation,’ 50 percent and 34 percent, respectively.
