The following is an excerpt of a story from CoStar, written by Mark Heschmeyer, published June 6, 2012. The original article is available here:
This week’s disappointing job growth numbers make it abundantly clear that it’s still a tenants’ market out there and no amount of aspiring to the contrary will make it easier for landlords fighting to attract and retain them.
The job news “is an obstacle and a cautionary line creating uncertainty in the short-term outlook,” said Carl Conceller, principal of NAI Desco in St. Louis, MO. “Landlords are keenly aware of the limited tenants in the market place and the need to maintain occupancy in a highly competitive market. Landlords will continue to be aggressive in structuring leases to capture tenants as early as possible, while blocking them from the competition.”
There are changes afoot in the world of accounting dealing with how companies should treat their leases – for both lessors and lessees. Those changes will have an immediate impact on the sale of investment properties. There are several areas where the impact will be manifest, including:
- Tenants may be incented to sign shorter leases;
- Tenants will be less likely to sign renewal and expansion options into their leases; and
- Corporate users may find it more favorable to buy than to rent properties they wholly occupy.