For the past two years, office building rents and occupancies have continued to decline, but new research suggests this may slowly start to change.
Tenants have had the upper hand for a while now, but businessmen suggest landlord concession packages arenb t going to get any better from here, prompting more tenants to sign long-term leases now while the price is right. And if employment greatly increases in 2012 as expected, landlords will be better situated to battle for the advantage; as more jobs open up, rent prices can rise as well.
Job creation—absolutely key to the recovery—likely will occur very slowly in the coming months. But for now, we can relish in the fact that the worst may very well be behind us.
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I was speaking with a client on the phone the other day in regard to his office building that I provide leasing services for. He was lamenting over the fact that he wasnb t able to project occupancy in the coming quarters for his properties. b I used to be good at forecasting, Ken, now I donb t knowb &b
I chuckled at his statement and responded that I thought for the time being forecasting was a dead concept. Oh, we can make all the predictions we want, I told him, but based on what metrics? I also told him that I believed we had entered into a time of unprecedented uncertainty, and that the old norms had either b faded away,b or, more accurately, blasted to smithereens. Even the government has caught on to this idea.
Chairman of the Federal Reserve Ben Bernanke has even testified before Congress this past week that the economy was unusually shrouded in mystery.
After my phone call concluded with my client I sat down and made a list of events or situations in the U.S. and abroad that are providing significant destabilizing influences:
1. High unemployment in the U.S.
2. A continued weak banking sector at home and abroad
3. The globalization of all financial markets—the global stock markets are no longer tied to their respective national economies
4. The European sovereign debt crisis and the war of ideology between austerity measures and economic stimulus
5. A record high U.S. budget deficit and the absorption of GDP it consumes to support it
6. The impact of technology automation on the workplace and its effect on the labor markets
7. Environmental disaster in the Gulf of Mexico (GOM) and its effect on the fisheries, tourism and energy sectors in the GOM area
Taking into account my clientb s interest in seeing his office properties fully leased, I believe the issue is what will stimulate employment growth? There needs to be some specific reason for U.S. employers to begin hiring. Only then will vacancy rates begin to decline. The overall effect on technological automation has acted and will continue to act as a limiting factor to hiring. If software can enable one worker to do the job of three (in certain industries), that certainly will hurt future employment growth.
In truth, I could list several more pages of destabilizing factors that are affecting the U.S. economy and its impact on commercial real estate. I predict that we have entered an age of extreme uncertainty. We have found ourselves stuck in a commonly quoted curse attributed to the ancient Chinese—b May you live in interesting times.b I think web ve definitely arrivedb &
While many CEOs remain in the dark about social media, a few are using web video quite successfully to attract and engage customers.
One such CEO, Pam Liebman of the Corcoran Group in New York City, has created a video presence on During the videos, Pam answers questions from Facebook and Twitter followers about the state of the market, allowing her to demonstrate her knowledge and expertise to potential clients.
For details about 12 CEOs across disciplines creating a video web presence to enhance business, click here.
Is your company taking advantage of web videos? Let us know.
With the prevalence of smartphones, iPads and laptops these days, the line between work and play is getting fuzzier and fuzzier.
As psychiatrist and business consultant Alan Langlieb told The Baltimore Sun,
“It used to be that work was like a belly button: You were either in or out. And now, for most people who work, they’re always in. Technology allows you to be at work 24 hours a day anyplace in the world. You end up seeing nonstop work where there’s never really an off period.”
Further, an increasing number of Americans on b vacationb check in with work, sometimes multiple times a day.
Especially with increased work pressures caused by the recession, people with growing responsibilities worry about getting too behind while theyb re away or donb t want to miss a great business opportunity, so they stay plugged in constantly.
Other employees concerned about layoffs fear taking days off at all. More than 35 percent of workers have said they wonb t take all their vacation days, as detailed here.
Where do you draw the line between work and time off? Let us know.
Photo credit: marketplace.publicradio.org
Despite the tough economic climate, many small business owners are still letting their employees leave the office early on Fridays, while others have continued providing at least some variance of the perk. Some companies that need staffers available to help customers, for example, will have their employees switch off Fridays they can take off early. Another firm transformed Summer Fridays into employees taking one Friday off per month rather than closing early every Friday.
But why continue the Summer Friday tradition, especially when many companies are now operating with fewer employees? The main reason cited by business owners is to keep up morale and let employees know that theyb re important. Especially for smaller businesses, this little perk can help attract good workers.
Click here for more information.
How is your company handling Summer Fridays? Do people leave a couple hours early on the last day of the work week, or are they still plugging away until 5 p.m.? Share your thoughts.
Photo via Flickr
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