Debra Hazel writes in Globe Street, and qouting from Mindy Lissner at CBRE that there has been a signficant uptick in industrial leasing in New Jersey. We have also seen a significant increase in industrial and warehouse leasing here in Southern California, see my post on January 20th. Mindy opines that this increased activity is coming from tenants who have been sitting on the sideline since the bottom of the market and are now are leasing space because they are concerned about rising rents and that if they have to rent, they want to grab the space at the lowest rent possible.
I refer to, what Mindy is describing as, "Strategic Leasing." Mindy is a broker who apparantly has her ear to the pavement, so to speak, and I am sure that there is quite a bit of strategic leasing being done at this time. If you know you are going to need the space, you might as well grab it while it cheap. I do the same thing when I get a coupon from Staples for discounts on paper and ink. I know that I am going to use it so I might as well get it when its $25.00 cheaper than when I run out of paper.
But what happens if the tenant's don't have the immediate need for the space and it sits vacant for a couple of years? Will they sublease at lower rents and reduce the value of the market or just let the space sit vacant? Is vacant space a good thing? What about the bigger pictur? Does all of this portend good times for employment and the economy?
Well I have given up trying to read the tea leaves and predict the future of the economy. I'll leave that to Debra and Mindy. I will say, however, that I would rather see the leasing activity than none.
Recent Comments