CALL JEFF: 800-507-6673 WHAT WE DO LOCATIONS SOLUTIONS ABOUT CONTACT Articles Commercial Real Estate Rebounds This article from the Wall Street Journal sheds some light on the purchase demand for office buildings, but also highlights how central business districts in major cities (San Francisco, Los Angeles, New York, etc.) are continuing to suffer much reduced demand for space…which translates into much better lease deals for tenants looking to either relocate there or who are looking to renew there. Kilroy Realty Bets Companies Are Ready to Get Back to the Office Leasing Picks Up in Early 2021 as Office REIT Builds Labs, Offices This CoStar article highlights what one of the West Coast’s biggest tech landlords is hearing from their tenants such as Google and Apple: companies and their employees are ready to get back in the office to collaborate! They are already signing leases for unfinished developments. This is great news for our economy, the Associated Press reported just this morning that U.S. productivity fell by the largest amount in 39 years. Hope Despite Pandemic Related Office Closures - Jeff Tabor Group Signs Over 56,000 Square Feet in December “I have spoken frequently over the months on how the pandemic is changing how we all do business. One day the office is dead, the next day everyone wants to go back to collaborate. I firmly believe that like retail, the office isn’t dying…it’s just evolving, and I am very proud to be part of these sizable companies maintaining their leaseholds in Orange County.” says Jeff Tabor, principal of Jeff Tabor Group. Goodbye, Open Office. Hello, Dynamic Workplace. Whatever the “look” of offices will be when we all “go back”, it is my belief it will be more of a hybrid return. That is, many more firms will be allowing a good portion of their workforce to work both remotely and at the primary office location...perhaps 30-40% of the workweek will be remote, with the balance at the office. This will directly result in reduced demand for space and, consequently, softer long term rental rates and increased landlord concessions. This article from the weekend edition of The Wall Street Journal outlines many possibilities. Hope for a Quick Turnaround Diminishes Further as Pandemic Wears On The fall of office rental rates is taking longer than most tenants have expected considering the current crisis. Many economic indicators are grimmer than the 2008-2010 crisis. Hundreds of thousands of square feet of office space in Los Angeles are empty, another 8 million square feet is currently under construction…and subleases are at an all-time high. This brief article hits the highlights of the current market. It might be time to start looking… Office Sublease Space Pours Onto the Market in Pricey LA Coastal City in Pandemic Santa Monica, California, a coastal Los Angeles County city nicknamed Silicon Beach for its high concentration of tech firms and investors, had more than 1 million square feet of office space available for subleasing as of Aug. 19, nearly 40% more than the prior record set in 2009, according to data from CoStar Group and area brokerage firms. Pandemic Disruption Cuts Commercial Real Estate Borrowing in Half In a measure of how much COVID-19 has affected commercial real estate, mortgage loan origination fell 48% in the second quarter from a year earlier, according to a new report from the Mortgage Bankers Association. The primary damage came in the initial few weeks after the outbreak in the United States, when lending came to a near halt. Since then, the pace of lending has been picking up, but the pace and amount lent indicate it may be a while before it returns to pre-coronavirus activity. Skyscraper Reflects New York’s Woes The Empire State Building, New York’s most famous office skyscraper, has come to reflect much of what ails the city and its commercial real estate during the Covid-19 pandemic. The tower looks vulnerable to losing office tenants as more companies embrace remote work or cheaper satellite offices outside city centers. Some in the industry say it is worse off than many peers because the building relies on smaller office tenants... Amazon Bets on Office-Based Work With Expansion in Major Cities The e-commerce giant says it is adding 3,500 employees in six major cities... Amazon.com Inc. is expanding its physical offices in six U.S. cities and adding thousands of corporate jobs in those areas, an indication the tech giant is making long-term plans around office work even as other companies embrace lasting remote employment. Office Landlords Hire Hygienists, Scientists and ‘Ambassadors’ to Try to Check COVID-19 at the Door Commercial property owners across the nation are hiring for positions such as “experience ambassadors,” hygienists and even an on-staff medical doctor to help make returning to the coronavirus-era workplace feel as safe and seamless as possible for companies. The pandemic has created a whole new category of jobs for the commercial real estate industry in an effort to reduce the risk... Large Companies Are Reimagining Their Post-Stay-at-Home Footprint HomeStreet Bank CEO Mark Mason said he knows the Seattle-based company has a lot of space, too much space, in fact. So when the coronavirus pandemic temporarily shut down the country's economy within a two-week span back in March, the community bank began to plot how it could emerge from the crisis with a more efficient footprint. How many pandemic job losses will be permanent? I have seen a University of Chicago study referenced in a number of articles I have read recently...this study estimates between 32-42% of jobs lost during this pandemic will be permanently lost…ouch! Not a good omen for office space demand. Companies Start to Think Remote Work Isn’t So Great After All This article in this past Saturday’s edition of the Wall Street Journal really hits home (no pun intended) as to the now realized cons of so many folks trying to work from home. It was relatively effective at first but now we are starting to realize some of the potential negative side effects. I believe office space will still be in demand, but I would expect a downturn in that demand over the next 2-3 years, of upwards of 25%...which means landlords will be getting much more aggressive in their lease negotiations. From my present experience, they already are…significantly. Work Elevators Raise Virus Concerns Elevator safety is a top priority in office buildings right now and the economy is not even fully reopened...far from it. Capacity is being restricted to as few as two people in most high-rise buildings. Riders must queue while maintaining social distance, then stand in designated areas, wear masks and many are being asked not to speak while inside. Office Markets Are Preparing for the “New Normal” COVID-19 has been a shock pubic health and the economy. As the toll of new cases starts to subside in some states, it is becoming clear that “normal life” in the future will be different from our pre-COVID days. Changes to our work routines have been so significant that some will be permanently adopted. What does this mean for the office market in the near term, and in the long term? Could Lower Floors Become More Valuable During Pandemic? The public health upheavals of COVID-19 have affected every facet of our lives. People are even moving from condos and apartments into single-family homes at an unexpected rate. This trend may spill over into office spaces and have some longer-term impacts on high-rise office buildings and even constrain availability for space on lower floors as well as low-rise buildings. THE OFFICE OF TOMORROW WON'T LOOK LIKE THE OFFICE OF TODAY There is no going back. Only moving forward to a healthy, well and resilient new generation of space. No one could have predicted the tectonic disruption to America’s business community that we’re experiencing right now. At the flip of a switch, everything we have ever known to be true about corporate protocols and operations came to an abrupt halt. Office Vacancies Are All but Certain to Rise Before the coronavirus outbreak, the Los Angeles office market was in a favorable position with vacancies near a decade low. Gross leasing levels during 2019 were in line with the past several years. What Companies Are Saying About Us! Have a look at what companies are saying about us and the work we do for them!! How Offices Of The Future May Compete With Remote Work Before the pandemic, about 10% of workers able to work remotely did so full time, and an additional 20% did so some of the time, according to Gartner. Now, chief financial officers the company surveyed indicate 19% of workers will go remote full time and 29% will go remote some of the time. Proposed Commercial Eviction Moratorium Leaves California Landlords Scrambling New Gated News A proposed bill aimed at providing eviction protections to some of California's commercial tenants is setting up a battle among lawmakers and landlords. A Reckoning if Working From Home Becomes the Norm Even after the crisis eases, companies may let workers stay home. That would affect an entire ecosystem, from transit to restaurants to shops. Not to mention the tax base (NYT Article) Pandemic Causes Large Office, Industrial Developers to Hit Pause on Speculative Construction Kilroy Realty Corp., one of the most active developers in the top office districts along the West Coast, said it won't start any new speculative projects and may not begin any new construction for at least a year. The company is the latest of office and industrial developers from Los Angeles to Washington, D.C., that have announced plans to halt most new construction, especially projects built without signed tenants, as landlords wait to see if they will receive their next rent checks from companies paralyzed by the coronavirus pandemic shutdown. CoStar Insight: Even Optimistic View Suggests Vacancies Could Reach Previous Recession Levels Prior to the coronavirus pandemic, the Los Angeles office market was in a favorable position with vacancies near a decade low. Gross leasing levels during 2019 were in line with the past several years. However, since the impacts of the coronavirus have continued setting in, there has been a clear deceleration in gross leasing activity. The market has experienced minimal leasing levels since the middle of Marc.... The Post COVID-19 Economy The good news is that number of new, confirmed cases of Coronavirus in the United States has, at least for now, peaked and appears to be falling. Stay-at-home mandates across the nation have been having their intended effect of limiting the spread of the virus beyond the initial surge. We are far less cognizant, however, of what the full scope of the shock will be, as economic statistics significantly lag public health stats. Emergency Rules For California Landlords The Judicial Counsel of California adopted 11 temporary emergency rules in response to COVID-19 pandemic affecting eviction proceedings, judicial foreclosures, and statutes of limitations for civil causes of actions, among other things. The rules adopted April 6, 2020, are effective immediately and apply to all California state courts. Landlord's Playbook for the Pandemic Here at the Jeff Tabor Group we have been spending our days working out how best to serve our clients during the current health crisis, including keeping an ear to the ground for any information about how it’s effecting commercial tenants. Just this morning, our efforts paid off when we came across the Playbook one of the best commercial real estate law firms is now using in advising their landlord clients during this pandemic…very, very insightful. As Rent Comes Due, Landlords and Tenants Have Decisions to Make With rent and other bills coming due April 1, some small-business tenants affected by the coronavirus are facing tough decisions regarding whether to work out extension terms with their landlords, or simply fold their tents and move out because the business is beyond rescuing. Force Majeure And Business Interruption Insurance May Not Be The Solution As tenants and landlords brace for mass building closings, lease disputes and funding issues in the midst of the coronvirus pandemic, they are flocking to their attorneys to discuss protections like force majeure that may soften the blow. 8 Things to Know Before Signing a Commercial Real Estate Lease It’s essential to read and understand the fine print of a commercial real estate lease before you sign it. Once the ink has dried, it’s often too late to make any changes. Your business may be negatively impacted by the terms and conditions you agreed to. Get These Five Documents Before Proceeding with Lease Negotiations There are several documents relating to office building CAM costs and other operating expenses that can show you whether additional rent will end up wreaking havoc on your cash flow Five Ways to Limit Your Liability for Operating Expenses Most commercial leases that require payment by the tenant of its share of the building’s operating expenses include a lengthy definition of the term “operating expenses.” 10 Golden Rules for Office Tenants in a Renewal Negotiation 10 Golden Rules for Office Tenants in a Renewal Negotiation Office tenants face an inherent disadvantage in the renewal negotiation, and they usually lose money when renewing their... Avoid Overpayments with Audit Right "A typical landlord won’t object if you ask for an audit right in your lease to avoid overpaying. After all, there is no justification for pushback other than wanting... 8 Things you need to know about the new lease accounting rule "You don’t need us to tell you that big changes in lease accounting rules are afoot. And if you’re looking for technical analysis of the new rules,... Our Privacy Policy FIND HIDDEN OPPORTUNITIES - SAVE MONEY - AVOID MISTAKES. WHAT WE DO LOCATIONS SOLUTIONS ABOUT CONTACT CALL JEFF: 800-507-6673 © 2021 JEFF TABOR GROUP WEBSITE DESIGN