Landlords Can’t Afford to Ignore Traditional Tenants over Tech Companies


It’s an exciting time in the Chicago tech scene, with new startups changing the entire face of our commercial real estate market. This infusion of creativity and drive is fantastic for our city, but is it really driving our overall economy forward? Reports say it’s not.

According to the Bureau of Labor Statistics, the Leisure & Hospitality, Construction and Professional Services industries led the market in job growth in May 2016. Tried-and-true professions – e.g. lawyers, accountants, architects, etc. – are the real drivers in keeping Chicago diversified and thriving. These facts, however, are not receiving the same attention as tech to keep the commercial real estate industry fully informed.

Landlords across Chicago are investing in these tech companies, providing incentives such as tenant improvement dollars, rent abatement and leasing commissions, in the hopes they will turn into long-term commitments. Like banks, though, landlords can’t lend on ideas over a tenant’s actual ability to pay. We need to continue to support our tech scene while remembering which leasees prove to be the smartest investments.

The Beginning of the End for Co-Working Spaces


Co-working spaces have been grabbing square footage in cities across the world over the past several years, fighting over who gets to house the influx of innovative startups and budding entrepreneurs. It appears that this market has hit oversaturation, and even the biggest names in co-working are starting to pull back.

WeWork cut forecasts earlier this year, and the CEO has pronounced an end to the company’s “spending culture.” Even though WeWork says its profits are stronger than ever, it’s hard to imagine how long that will last.

The community atmosphere offered by operators like WeWork is undeniably appealing, but it’s no longer a novelty. Traditional companies across Chicago are remodeling their offices to embrace a collaborative spirit and recruit young, creative talent. This, combined with a notoriously difficult business model, most likely signals the beginning of the end for co-working spaces.

Sublease Available in the Civic Opera Building


 

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Sublease available through March 2019 in the famous Civic Opera Building, 20 N. Wacker. Versatile space comes fully furnished with access to a kitchenette.

Details:

  • 1,772 RSF
  • Sublease available through March 31, 2019
  • $32 Gross
  • Open area with 2 work stations
  • Conference room
  • 2 private offices
  • Fully furnished
  • Kitchenette

Interested? Contact Bill Himmelstein at bill@tenantadgrp.com.

Tenant Advisory Group, Office Sublease, Civic OperaTenant Advisory Group, Office Sublease, Civic OperaTenant Advisory Group, Chicago Sublease

Lease Office Space in Vibrant River North Tech Community


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Lease office space on the second and/or third floors of a quiet building at 744 N. Wells. Located in River North, this opportunity also comes with access to VentureShot networking events.

Details:

      • Steps from the Chicago Brown Line
      • 2nd floor: 2,530 RSF, 4 oversized offices, 3 large offices, 1 conference room
      • 3rd floor: 1 large office, 2 small offices, 1 large conference room
      • Access to VentureShot (ground floor tenant) events
      • Rent by the office for $500 – $2,500/mo

Interested? Contact Bill Himmelstein at bill@tenantadgrp.com.

Tenant Advisory Group, 733 N Wells, Lease, Lobby

Tenant Advisory Group, 744 N Wells, LeaseAbout 744 N Wells

744 North Wells in River North is in the heart of Chicago, making it the perfect location for many businesses to call home. Venture Shot, a startup aimed at helping other startups, brings a community feel to the building with numerous events that help businesses grow revenue, scale and get funding or investments. With the seamless blend of private offices, amenities and conference rooms, this space provides a unique combination of networking opportunities, community and hard-working businesses.

Amenities

Furnished/Unfurnished Spaces
All Expenses Included
Concierge Services from Managed by Q
Free Wi-Fi
24/7 Access
Wheelchair Friendly
Quiet, Private Offices
Flex Space
Free Scheduled Use of Conference Room
Free Access to VentureShot Events
Great Networking Opportunities
Within One Block of Brown Line
Walking Distance to Michigan Ave.
Across the Street from YOLK
Bike Rack on Wells St.
On-Premise Car Parking Available
Free Coffee and Water
Weekly Cleaning Service
Full Kitchen
Dishwasher
Air Conditioning
Elevator

Do you Qualify for Rent Abatement?


Commercial leasing agreements commonly extend up to 10 years – or  longer – making negotiations key to long-term savings for your business. One of the greatest opportunities to reduce your monthly cost is rent abatement, or free rent. As you begin the discussion with a Lessor, it is important to understand what rent abatement is and how it can be used to your advantage.

Do You Qualify for Rent Abatement?

Unless there are extenuating circumstances at play, rent abatement is a provision best considered during new or renewal lease negotiations. This is when the Lessee has the most leverage, especially if a business has already shown itself to be an ideal tenant at the current or a previous property.

Why Would a Landlord Provide Free Rent?

If you are a new business needing time to get up and running, or even an established business faced with moving costs and possibly contributing funds to a buildout of your space, the Landlord should understand that you will need some time to build cash reserves back up before the payment of rent commences. If the Tenant is providing the Landlord a large cash security deposit, this is great leverage to negotiate more months of abatement. Furthermore, the cost of acquiring valuable tenants – tenants that take care of the space and pay rent on time – is not insignificant to the Landlord. Leasing commissions, background checks and potential lost rent due to time the space would sit on the market are just a few factors they need to take into consideration when faced with negotiating leasing terms. Potential or current tenants can position rent abatement as a concession that benefits both parties.

How Can You Have this Added to My Lease?

Many business owners don’t realize rent abatement is an option, so simply knowing about and presenting this as an option during negotiations is half the battle. When entering into a discussion with a landlord, present this incentive as one of several the Lessor can provide to reach a mutually beneficial outcome. All negotiations are a give-and-take, and ultimately the Landlord needs to know they will not be losing money in the process. Rent abatement is one of the key terms that can be negotiated, along with tenant improvement dollars and rental rate, in order for both the Tenant and the Landlord to feel they’ve achieved a mutually beneficial deal.

For more of Tenant Advisory Group’s expert tips for negotiating your commercial lease, click here.


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