Hidden Space: Don’t Believe the Hype
Dear CFO:
The next time you are in a meeting interviewing a real estate professional to help represent you on your firm’s relocation or potential renewal, you are likely to hear at least one person you interview say the reason that you should work with them is because “they offer access to spaces that no one in the market has.” Please know that is very very very unlikely.
If you were trying to sell your house or apartment would you only call 5 people to see if they were interested in buying it? Or would you try to get as many people to know about your house so as to reach the largest potential pool of people who might either be interested themselves or know people who were interested? The latter, exactly.
It’s the same in office leasing, with 400mn square feet in Manhattan it is in a landlord and sublessors best interest to let as many people know as possible. Why? Because it’s not so easy to find a tenant. It’s like having a pair of size 6 sneakers for sale. Not everyone has the same size foot, just like not every company has the same exact needs for space from size to number of offices to amount of open space.
There are a few instances when space is not yet “on the market.” In subleasing, sometimes their is a small window of time when the sublessors agent will share a space with“friends and family” before they release it to the market at large. And some times a landlord will keep back some space if they have a lot of other inventory already on the market. But again this is the execption not the rule.
Each day space sits vacant it is a day of rent that a landlord is not collecting. Landlords leasing offices and companies trying to get ride of unwanted office space need to increase their odds of finding a tenant.
Keeping a space hidden, secret or off the market is NOT in their best interest.