Tips for Tenants in a Rising Market
It’s no secret that rent is one of your company’s biggest expenses. And in a market where prices are seemingly constantly rising, it’s important to stay educated and aware of potential cost increases so you aren’t surprised later on. But with the potential for hidden fees and unexpected costs, there are several things that you can do to ensure your company’s financial future. Here are a few things to look out for in today’s rising market:
At Your Expense
As a tenant, you know that landlords are constantly investing in their buildings and adding amenities in order to attract new business and satisfy their current occupants. After all, what company wouldn’t like an improved lobby area, or refurbished cafeteria? By stepping up the quality of their spaces, landlords are in many cases increasing the value of their properties. But keep in mind that at the end of the day, someone is paying for these improvements- and it could be you. When considering a new building, it’s important to understand what the current operating expenses are as well as how they may change in the years ahead.
The Brass Tax
Taxes: we all get to pay them. And as landlords sell buildings and municipalities apply newly assessed values, real estate taxes can increase sharply. Property values rise as rents continue to go up, and as buildings are redeveloped to accommodate market demand. While it can often take a city a few years to catch up on these values, the sale of a property typically triggers a municipality to evaluate and reassess. The best thing you can do is be diligent, so you’re aware of any increases coming around the bend.
The WeWork Effect
The demand for quality space is higher than ever. But with that demand comes a market with an extremely limited supply. In the last few years, co-working spaces like WeWork have evolved into constant competitors for available inventory, snapping up top-of-the-line properties and spaces. This is a sharp contrast to the past, when the only competition companies faced was other traditional occupiers Now, countless co-working operations are gobbling up a significant amount of property.
While these changes in the market can affect your company significantly, it doesn’t have to be in a negative manner. By working with Cresa’s experienced advisors, you’re provided assurance that a specialist is monitoring the market and can keep you up to date with the ever-changing real estate market.