Landlords Need Love Too
Written on November 30, 2011 at 12:17 pm
From the Desk of Ken Silberling – Director of Business Development
I have a great archive of old real estate e-mails and brochures. One of my favorites, from 2007, is “Hate Your Landlord” – how to buy an office condo. I’ve always believed there is a place in the market for office condos, but for a majority of businesses, leasing is a far better alternative. If you leased commercial property between 2005 and today, you should be loving rather than hating your Landlord. 
The rise in property values and office rental rates from 2005-2007 ignited an office condo boom which included new construction as well as conversions. A number of the earlier projects in the cycle were quite successful, but the condo boom was relatively short lived.
Here in Boca Raton, two projects come to mind, one a new development and one a condo conversion. In the new development, condos that were originally marketed at $280 per square foot for unfinished space are now being marketed at $150 fully built out. In the case of the conversion, space that was originally marketed at $225 per square foot is now available at $150 or less. If you purchased a small office of 1,000 square feet, that means you would have lost $75,000 to $150,000 in equity in addition to the mortgage and operating expense payments that would be fairly close to your rent on comparable space.
As Landlords, we have learned a thing or two about the advantages of leasing. We specialize in small spaces for entrepreneurial tenants. A business is a living, growing and changing organism. At our Preserve at 7700 Congress property, over 60 percent of our tenants have expanded, downsized or both over their lease terms. Leasing gives a business the flexibility to respond to market conditions and right-size it’s space as needed. Much of our success at Danburg Management has come from focusing on the relationship; understanding and responding to our tenants’ changing space needs. If our tenants are successful, we are successful and we make every effort to ensure out tenants’ success.
In certain cases such as solo accounting practices or small legal partnerships, a firm’s space needs are static and office condos make sense. But we live in a dynamic environment where needs constantly change. As Landlords, we are real estate professionals. Our business is to run our properties and make it easy for you to operate your business. Your time and your money is best spent on your business. It is best for you to make deals and build widgets, let us unclog your toilets and fix your a/c. Home ownership works because a family’s space needs change very slowly. Most families don’t bring on four new sales associates and suddenly need a larger house.
So remember, your Landlord needs love too. At Danburg Management, we provide a great home for your business, we offer competitive rates, and we give you the freedom to do what you do best. We’ve also taken it a step further by encouraging the development of business relationships amongst the 200 businesses in the Danburg Management Community. Stop in and see why it’s great to lease at a Danburg Management property.