Here’s an eye-opener for you… now is a great time to be a commercial tenant in the Boston market looking for space! Okay, maybe it’s not an eye-opener… just a fact.
Asking rental rates are down across the board for direct space in virtually every submarket of Boston. On top of that, there is an influx of sublease space on the market with asking rental rates 15 to 40 percent less than the already deflated asking rates of direct space.
Most companies, large and small, that are offering sublease space on the market just want to stop the bleeding and are happy to do a deal less than what they are currently on the hook for. If they are paying $20 per square foot they are typically ecstatic if they can get a subtenant paying $15 per square foot, giving you, the subtenant, a 25% discount for the same space. The primary tenant is still on the hook for $5 per square foot but it’s certainly better than paying the entire freight.
For example, we are currently in the process of doing a sublease deal with a client where the direct asking rent for space in the building is $17 per square foot and we’ve negotiated a $10 per square foot sublease deal… that’s a 41% savings to our client!
The other advantage of sublease space for growing or startup companies is that you can get space in a much nicer building that you otherwise might not be able to afford giving your business the image you are looking for at a price you can afford. This allows you to get in at a sublet rate for a couple years while you continue to build up your business and then you can have your broker negotiate a direct deal with the landlord if you want to stay in the building.
Here’s the catch… there is no catch! If your business is in the market for commercial space it couldn’t be a better time. Whether you are looking for a sublease opportunity or direct space, you’re in the driver seat! Not only is the sublease market competing for you as a tenant, landlords with direct space are competing against the sublease market. Competition is a great thing as it has an inverse relationship with price… the more competition (supply) the lower the price!