Tenants can find deals on office leases….but don’t leave it too late in Dallas!

Dallas high office vacancy rate which routinely tops 20% is now at 26% and has kept lease rates from rising. In fact they are down 11% in the last 12 months. This is one of the largest vacancy rates in a central business area of any large city in the US. Average effective lease rates in Dallas at $19.94 per-square-foot are the lowest in the 12 largest US cities.

This presents a tremendous opportunity for tenants to save.

Most economists predict Dallas will be amongst the first to rebound from the recession because of the North Texas’ growing population, low business costs and better-than-average growth outlook.

If tenants wait a year or more, it’s likely that vacancy rates will be headed back down, leaving tenants with fewer options and less leverage.

Tenants need to move relatively quickly.

Some tenants are signing short-term leases while waiting to see what happens with the economy while others are locking in low rates on long-term deals.

Landlords are still hungry in this market. There is still a lot of downsizing going on and landlords still have to be pretty aggressive to attract and retain tenants because the deal volume is down.

Naturally, landlords in buildings that have experienced a substantial increase in vacancy are offering deep discounts.

Retain a commercial estate broker to obtain comparative property lease rates and investigate ‘blend and extend” arrangements to receive the lowest possible rates. Also, don’t forget to tap into leasehold improvement incentives that can be used as to pay rents if not used.