Creative Solutions to Fill Your Empty Office Space
Creative Solutions to Fill Your Empty Office Space
By Elizabeth Holmes
In today’s dynamic market, where it is increasingly difficult to secure traditional office users, it is time to consider creative solutions to fill your vacant office or flex space in Greater Boston. Here are some ideas our team at R.W. Holmes has been able to implement with success:
Strategic Subdivision: Adapting to Office Downsizing Trends
About 70 percent of office transactions in the second quarter of this year involved spaces under 4,500 square feet. The trend of downsizing, influenced by smaller tenants, is expected to continue for the next 18 months. If you happen to have a significant contiguous space, now might be a good time to consider subdividing if it makes economic sense. By exploring these options, it may be possible to better meet the preferences and needs of these smaller tenants.
Case Study: We recently recommended that our client, Atlantic Management, subdivide a 5,000 SF suite at 205 Newbury Street in Framingham into two 2,500 SF suites. The 2,500 SF suites were leased within three months, while the 5,000 SF suite had been on the market for over nine months.
Understanding Today’s Office Tenants: Premium Seekers vs. Cost-conscious Explorers
Additionally, there are two types of office tenants in the market: those looking for Class A, premium space and willing to pay higher rent to provide employees with the highest image and amenities. The second type of tenant is those in slightly older/with fewer amenities Class A-/B+ buildings that cannot justify rising rents and are looking for cheaper seats.
Today’s tenants are also increasingly open to exploring different sub-markets to find cost-effective yet high-quality office spaces, especially if it means a shorter commute time for employees.
Case Study: In a recent case, we finalized a deal for a tenant, Ceaco, who relocated their 10,000 SF office from Newton to Canton. This shift helped them cut down on rent expenses, improve their office space, and offer a more convenient commuting option for a majority of their staff.
Creating a Niche: Adapting Office Buildings for R&D and Light Manufacturing Tenants
Depending on your location and building infrastructure, you may also consider accommodating light manufacturing/R&D users. Office buildings with light loading, shipping infrastructure, and heavier electrical power are the most suitable for this. Office buildings with these characteristics provide a unique niche in the current market for R&D tenants who want a high-image space for their employees but still need operational efficiency for their manufacturing needs.
Case Study: We advised the owners of 320 Norwood Park South to add a freight elevator to the second floor to accommodate R&D uses with light shipping needs. Following this modification, our efforts led to the successful leasing of 12,000 SF of space to Gentex, an R&D firm from Boston.
Addressing Sublease Competition: Benefits of Ready-to-Use Suites with Discounted Rates
As the sublease market continues to expand, building owners are now competing more often with move-in ready, sometimes discounted sublease options. To compete with these subleases, owners can consider multiple factors such as move-in-ready suites, providing furniture, shorter lease terms, or potentially discounting rates. Not all these options need to be implemented, just identifying the one that differentiates your building from the competition will be impactful.
Case Study: We were recently hired by Capstone Properties on 70 Blanchard Street in Burlington to fill several holes in office vacancies. Our recommendation to provide furnished move-in ready suites has led to noticeable outcomes. In the 30 days since we started the leasing assignment, our marketing approach has led to over 30,000 SF of prospective tours.
Repurposing Vacant Office Buildings: MBTA Communities Act/Housing Choice
Another possibility is conversion to housing. As cities and towns in Massachusetts undertake zoning updates to comply with Housing Choice requirements, we’re keeping a close watch on communities implementing noteworthy zoning changes that will allow significant conversions of vacant office buildings to reduce future excess supply.
Case Study: We are working with several office building owners now to negotiate with a large multi-family developer looking to convert their properties for Housing Choice.
Have Lingering Vacancies? We’re Here to Help
As the market evolves, strategic adaptation is essential. The opportunities are vast, whether it involves exploring subdivisions, catering to diverse tenant needs, accommodating specialized users like light manufacturing or R&D, or considering conversions of existing spaces. Our seasoned brokers are prepared to help you navigate these paths and make well-informed decisions. Get in touch with us today so we can help you optimize the potential of your property and prepare it for the future.