News & Research Archive

Nothing Normal About Deal flow in 2010

Jan 01, 2011

 

I have been a commercial real estate broker for 26 years now and frankly I have not experienced such a different landscape in deal flow as in the last two or three years. I am not talking about our current economic state, which we all know has affected businesses in very difficult ways. I am speaking of a different issue where my clients have changed the way they plan to deal with their real estate needs.

For years businesses have planned their moves so that they physically move at certain times of the year. In the first quarter, one could count on a strong January through March because businesses were planning their moves for early summer. April and May would tail off but there would be a strong June and July, as businesses would plan for a third quarter move. September and October would be strong as businesses planned for a year-end move. All of that has changed. There are essentially no moving seasons anymore.

Businesses today have shortened their decision making process to a couple months down from six to nine months or longer as was originally the norm. Part of the lack of planning is that businesses are no longer following the typical pattern of a move. In years past, a typical tour would start off with an office manager doing the original scouting of spaces until a short list was created. From the short list, the final decision would be made as to where the office would move. More time was then spent with architects to design spaces. Today, tenants simply do not allow for the necessary time to plan out their offices like they used to.

As our society has moved to instant reward, so have businesses moved to instant "move mode". The issue is that without proper time and planning, these businesses are locking themselves into long-term spaces that will not be suitable for them in the long run. If there is an increase in subleases in the future we will know why.

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Written by: Hans Hansson

E-mail: hans@starboardnet.com


Hans Hansson is President of Starboard TCN Worldwide Real Estate Services as well as a member of the Board of Directors for TCN Worldwide Real Estate. Hans has been an active broker for over 26 years in the San Francisco Bay Area and specializes in office leasing and investments. If you have any questions or comments please email hans@starboardnet.com or call him at (415) 765-6897. You may also check out his website, www.commercialspacefinder.com.

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