Class A commercial space going, going, gone?
This past week, I had the pleasure of chatting with Christine Sable, CCIM, broker at Sable Commercial Real Estate in Lancaster County. When the conversation turned to the market (my big chance, by the way, to badger someone else with the “how’s the market???” question), Sable gave me a bit of a surprise with her answer: The commercial real estate market seems to have turned the corner in 2012.
“We’re definitely finding it harder to find the better-quality office space at this point,” Sable commented. Where not that long ago businesses in the market for space could choose among multiple buildings, much of that space has since been leased.
“I’ve seen quite a few properties that were sitting on the market for two years suddenly go under agreement or get leased,” she said. In fact, the inventory for newer or recently remodeled office/industrial (or retail, for that matter) in smaller square-foot ranges is definitely lower this summer.
In another category, the supply of downtown commercial spaces in Lancaster city with the “cool factor” (such as renovated warehouses or loft office space with exposed beams and brick walls) is just about nil, and landlords with class B and C spaces are working to upgrade in order to attract the tenants right now.
“It’s not uncommon to hear of multiple offers on good lease space these days,” said Sable, “particularly in the category of 1,500 to 5,000 square feet.”
When I asked what she thought might be the drivers behind this market activity, she pointed to a sense in the business community, at least in her area, that right now is probably the bottom of the market and, if a business needs to make a move, the summer and fall of this year are as good as we’re probably going to see in prices and terms.
Prices have definitely turned the corner and firmed up. While some larger businesses might still have expansion plans on hold, many smaller businesses are actually growing and need larger space.
Sable’s advice for my readers? “If you’ve been sitting on the fence, or keeping an eye on some space you like, make your move soon.”