Industrial landlords sweeten the deal

If your clients are looking for new warehouse space, now might be a good time for them to shop around. National warehouse vacancy rates for the first quarter of 2002 rose to their highest levels in six years, according to real estate-services firm Cushman & Wakefield Inc. as reported in the Wall Street Journal.

Industrial-space owners, worried about empty buildings, are warming to the idea of shorter leases with fewer restrictions. Tenants can walk away with four- and five-year deals rather than the once-common 10-year lease for bargain-basement prices. And unlike office space, tenants aren’t bound to tight restrictions on property improvements.

While some landlords scramble to fill warehouses, even at the cost of long-term security, others see the beginnings of a different trend that indicate their vacancies may soon decrease again. Despite the sluggish economy, there are tenants who feel confident about their company’s future; they’re locking in today’s cheaper rents for 10 or more years. So before an economic upswing brings about higher rents, advise your clients to assess their warehouse needs.

Photo © Brand X Pictures.

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