In the real estate boom of the last decade, we built far too much commercial space than we really needed. As a result, business owners have enjoyed really great rates on commerical space in recent years. Shopping centers in particular had so much vacancy that landlords were practically giving away the rent just to get some occupancy.
But the tide is turning. Shopping centers are filling back up, and rents are slowly ticking up. And now the shoe is dropping on office space as well. Since there was almost no new construction in the office building sector in five years, office space should soon become more scarce as well. (Of course, this presumes we don’t in fact hit the dreaded double-dip recession, but conditions don’t point to that right now.)
Clark advises businesses that it’s a good time to take a chance on the long-term right now. Seize the opportunity now to secure a long term rental on your office space.
However, there’s one big exception: if your business is growing dynamically, and you are unsure of where you will be and what kind of space you’ll be needing in a few years, it obviously may not be to your advantage to lock in on a long term rental!