Austin’s office space market favors Landlords right now since tenant demand is high and supply of available space is low. If you find the perfect office for your business, be prepared to move quickly or be OK with possibility of someone else renting the space before you do.
Austin office space vacancy rates are at a record low all over town which has made finding the right location a lot harder and more time consuming than a few years ago. In many cases landlords are entertaining multiple offers and going with the groups that are able to sign leases first.
In some cases tenants who have spent months negotiating a deal, doing test fits, getting construction pricing, etc, have had their ideal space leased out from under them because another group came along and was able to take the space “as is”. Landlord’s right now are in the drivers seat and because of how much interest they have on the best spaces they are likely to take the BBD (bigger better deal).
What can you do to mitigate this risk?
- Give yourself more time to find space. Finding the right space takes a little longer now. And because there is a chance you could lose the space to another group it's important that you give yourself at least 6 months depending on the size of your company.
- Consider more than one location - You may have your heart set on one location however it’s in your best interest to have at least one or two other spaces to fall back on in the event your favorite falls through.
- Don’t waste time making low ball offers - Be realistic. The Austin office market is hot which means rental rates are at an all time high. If you make a low-ball offer on a space that has a lot of interest there is a pretty good chance the landlord will not take you seriously and not want you as a tenant.
- Be prepared to move QUICKLY - Have your financials ready. Prep the decision makers to be able to make fast decisions and be ready and available to sign and/or provide documents when needed. If the landlord feels like you are not moving fast enough they will decide to work with the other parties
- Keep constant contact with the landlords and other parties involved. The more communication the better. You want to make sure they know you are serious and want the space. If you do not keep good contact they may think you are not interested and move on.
- Have your team in place - Make sure to hire a commercial broker with the right connections. This will ensure you don’t miss out on great opportunities. They also have the expertise to facilitate and negotiate an office lease faster than you could on your own. You also want to have your real estate attorney teed up and ready to review the lease contract when it’s ready.
In a low vacancy office space market such as Austin the best spaces are highly contested. Moving quickly will ensure you get the space you want. If you need help finding office space in Austin please don't hesitate to contact us.