Secondly, the rental markets have softened significantly in the majority of our markets. The rent increases have stopped and incentives have increased. The landlords are focusing on tenant retention at almost all costs. Rent trends of six months ago are no longer relevant as transactions over the last three months have often been significantly more advantageous for tenants.

Trends Across North America
Nearly every market is feeling the effect of the financial market strain. As usual, the more volatile markets are correcting more quickly. While high prices paid put upward pressure on rental rates, market forces are prevailing. The combination of higher interest rates, recent acquisitions, and lower vacancy rates led to the higher rents in most markets in 2007. The credit crunch and no job growth the last 4 quarters have reversed the vacancy rate drop, which has caused rents to soften. Many submarkets are already showing signs of significant downward rent adjustments. Many tenants are slowing or eliminating plans for expansion.

Opportunities for Tenants
Credit tenants with flexibility to move will find opportunities more abundant. When they are able to lock into long-term leases of eight years or more the opportunity increases. This presents a win-win scenario for both tenants and landlords as tenants can cut costs, upgrade space, and gain increased lease flexibility rights, while landlords can stabilize their rent flows. Of course, a corporate tenant should only capitalize on this opportunity with a clear view of the long term, allowing the company to create a strategic real estate plan that aligns with its business plan.

We believe that an advisor who can fight for tenant concessions and flexibility without fear of repercussions from landlords is best positioned to help tenants take advantage of the opportunity.

Note about CresaPartners
With more than 50 North American offices, over 250 affiliated offices worldwide and over $150 M in North American revenue, we are a major force in the representation of corporate space users. We hope you experience the difference when working with CresaPartners. We are the real estate firm that cares enough to listen.

For more details on market conditions and how you can maximize your real estate options, contact your local CresaPartners advisor or email expectmore@cresapartners.com.

Bill Goade
Chief Executive Officer
CresaPartners