Insight

What Tenants Need in a Landlord's Market

June 10, 2015

By Carrie Rossenfeld, GlobeSt.com

SAN DIEGO -- Tenants in the San Diego leasing market face a number of challenges and opportunities, Cresa's new SVP David Crabb tells GlobeSt.com. After recently joining the firm, bringing with him  more than 30 years of experience in real estate brokerage serving a wide variety of clients in the San Diego and Southern California region, Crabb spoke with us exclusively about trends he sees in tenant representation and some of the challenges and opportunities tenants face in a landlord’s market.

GlobeSt.com: What do you hope to accomplish in your new role at Cresa?

Crabb: To be able to better service my clients from a tenant-rep-only platform.

GlobeSt.com: What trends do you see in tenant representation in the San Diego market?

Crabb: I see it becoming more and more vital that tenants have proper representation in light of the fact that it’s becoming more and more of a landlord’s market, so tenants need an advocate on their side of the table looking out for their side of the negotiations.

GlobeSt.com: What are tenants’ greatest challenges and opportunities here?

Crabb: Their greatest challenges are twofold. First, a lack of supply in the marketplace is creating fewer and fewer opportunities for them to choose from and also putting upward pressure on rents. Many tenants are going through sticker shock now in looking at renewal or relocation; they’re shocked at how much rents have gone up in the last 12 to 18 months—mostly office space, but it’s trending up in the industrial market as well. It varies more by submarket; some submarkets are a lot stronger than others, but even in the industrial sector we’re seeing older-class buildings being purchased and repositioned into higher-end assets. This is taking away from the industrial inventory and pushing higher rents because these same assets are priced 50% to 75% higher than lease rates the same buildings before repositioning.

As for opportunities, tenants now have the opportunity to revisit their workplace environment and redesign that environment utilizing a better workplace strategy. Employees are seeking more creative, collaborative space, and a lot of firms are realizing that and accommodating Millennialsas a significant segment of the workforce in today’s marketplace.

GlobeSt.com: What else should our readers know about Cresa?

Crabb: CRESA is the largest tenant-only brokerage firm in the US. We work with and advise commercial tenants exclusively: no landlords or developers in order to be completely conflict free.