By Jason Hughes
I’ve been representing companies in their leasing and purchasing of space for nearly 30 years. I’ve been through four full cycles of ups and downs, and I fully understand supply and demand economics. I also “get” that we’re in a strong landlord market, and that rents go up as vacancy goes down. But there is taking advantage of the market, and then there is taking advantage of tenants. The latter is not to be excused.
Recently I’ve received two different proposals from an East Village landlord with a $5 per square foot starting rent. It wasn’t more than a few years ago when deals were being done for literally half that amount and, undoubtedly, there will be a time when rents go back to that level – if not lower. My beef is when landlords push too hard too fast. It literally takes money out of company coffers that would otherwise pay for employees, R&D, expansion, etc. (i.e. economic benefits for the many) vs. padding the already deep pockets of wealthy landlords. Rental increases are one thing. Rental abuse is totally different, and should not be tolerated.
Another Condo Complex for Bosa
An update to a much earlier story… Irvine Company is expected to close escrow next month, selling what was originally going to be Downtown San Diego’s next office high-rise at 880 West Broadway to Bosa Development for another high-rise condo tower. Congrats to Mr. Bosa for owning nearly every single bayfront property that’s available for residential development!
Executive Complex Under New Ownership
As mentioned months ago, Hammer Ventures finally consummated the purchase of the Executive Complex at 1010 Second Avenue. This is Hammer’s first foray into high-rise office ownership, and the developer couldn’t have chosen a more challenged building (except maybe the Chamber Building next door!) Time will tell if Mr. Hammer is a genius or goof. I give it 50/50.
Two America Plaza to Be Sold
The site to the north of One America Plaza, originally planned to be a 14-story hotel, is coming to market. Odds favorite will be the Irvine Company to purchase it given the complexities associated with the two-block parking garage and mechanical systems bridging both parcels. With the hot market and loose lending for development, the property is likely to be developed as a residential rental and hotel. Fingers crossed for more office though!
Jason Hughes is chairman, CEO, and owner of Hughes Marino, an award-winning commercial real estate company with offices across the nation. A pioneer in the field of tenant representation, Jason has exclusively represented tenants and buyers for more than 25 years. He writes about topics in commercial real estate from a tenant’s perspective on his blog, Downtown Dirt. Contact Jason at 1-844-662-6635 or firstname.lastname@example.org to learn more.