Tenants occupying Greater Boston commercial real estate may have the upper hand in lease negotiations these days. Commercial landlords, particularly those managing office buildings and life science spaces, are looking to mitigate vacancies as market conditions shift.
Commercial real estate markets nationwide are feeling pressure from higher interest rates. Unlike a residential mortgage, which typically spans 15 to 30 years, financing for commercial properties involves shorter periods, sometimes 5 years or less. Commercial real estate loan amortization can also involve a balloon payment due at the end of the loan term. When interest rates move higher, refinancing these balances becomes expensive.
At the same time, some employers are re-evaluating their office space needs and reducing their footprint. While some companies are issuing return-to-office mandates to their employees, others have adapted to hybrid models with work-from-home remaining a permanent option. Additionally, higher interest rates have made the cost of doing business more expensive for tenants, causing them to seek reductions in operational costs – including lease costs.
Commercial real estate tenants in Greater Boston should seek professional tenant representation before discussing a lease renewal or potential new lease with any landlord. Often, there are opportunities for negotiation regarding costs and termination clauses that can provide favorable terms for tenants. A professional tenant representative can also prospect potential locations for starting or expanding a business, and seek opportunities for sublease space, local business incentives, and so on.
Boston commercial real estate market conditions vary widely by sector and locality. Working with an experienced tenant representative is a must! If you are seeking a location in eastern Massachusetts, including Greater Boston, the South Shore, and inside of Route 495, team up with the Jay Nuss Realty Group, LLC. Whether you are thinking of buying, leasing, or investing in Boston Metro commercial real estate, we can help you find the ideal property!
Contact us today for expert guidance!