{"id":2595,"date":"2018-11-14T00:05:11","date_gmt":"2018-11-14T00:05:11","guid":{"rendered":"https:\/\/www.lee-associates.com\/houston-dev\/?p=2595"},"modified":"2018-12-07T17:19:53","modified_gmt":"2018-12-07T17:19:53","slug":"houston-office-tenants-want-to-trade-up","status":"publish","type":"post","link":"https:\/\/www.lee-associates.com\/houston\/2018\/11\/14\/houston-office-tenants-want-to-trade-up\/","title":{"rendered":"Houston Office Tenants Want to Trade-Up"},"content":{"rendered":"

Written by Rob Johnson<\/a>, Principal at Lee & Associates – Houston<\/em><\/span><\/strong><\/p>\n

Often referred to as moving-up, trading-up or flight to quality, many office tenants in Houston are taking advantage of the current market conditions to move into nicer office space.<\/em><\/p>\n

Some things change, and some things remain the same. Offices are generally located in areas convenient for the decision makers of the organization \u2013 this has not changed. What has changed is that offices are no longer the place where you just \u201cgo to work\u201d \u2013 they are \u201ceat, shop, exercise and play.\u201d \u00a0Today\u2019s offices are about more than just \u201cgetting the work done.\u201d<\/p>\n

As Houstonians see WTI oil prices climb and maintain (in October 2017, WTI was just above $50\/bbl and is hovering around $70\/bbl one year later),we believe the energy industry is moving in the right direction and that is impacting the office market.<\/p>\n

The trend for office tenants over the last three years has been to take advantage of the sublease availabilities in Class-A buildings created by companies affected by lower oil prices. Particularly if those tenants were in Class-B buildings and looking at the greener grass on the other side of the fence.<\/p>\n

In addition to looking nicer, a lot of Class-A buildings have amenities such as 24\/7 security, on-site eateries, workout facilities (some with country club style locker rooms), valet and car wash services.<\/p>\n

\"\"<\/p>\n

Employers know that good talent is hard to find and even harder to retain. The stakes are high with the local and national economy thriving as many employees find they are consistently being contacted by recruiters who are trying to lure them away to the competition.<\/p>\n

Companies that are looking to retain talent are going beyond the paycheck to make sure employees are incentivized to remain where they are and not \u201cjump ship\u201d to a competitor and cause disruption on projects. Having the amenities offered by Class-A buildings help employers keep their employees happy.<\/p>\n

Another employee incentive is flexible work schedules which is also allowing employers to change the way they utilize space. Giving employees the option to work remotely prevents employers from having to maintain a desk and chair for every member of their organization. In extreme cases of \u201choteling,\u201d where workstations are unassigned and employees can claim a chair and desk for a few hours and then leave the space for use by another, the organization can significantly reduce its footprint in a building, which ultimately lower costs. This reduced footprint can translate to nicer spaces by allowing the employer to parlay the savings into a more expensive office product.<\/p>\n

Landlords have recognized this new trend and are working to accommodate the paradigm shift; however, it can be a difficult and expensive undertaking for owners of older product. Some landlords try to \u201ccheck the box\u201d of having a gym by installing mirrors on the walls and dropping a treadmill in the center of the floor of a difficult to lease space in the interior of the building. Others have embraced the change and undergone significant capital campaigns to retrofit buildings, many times taking first floor leasable space and converting it into an amenity such as a lounge or caf\u00e9.<\/p>\n

Conversely, as companies staff-up in reaction to increased activity or in anticipation thereof and the increased demand begins to absorb the vacancies, tenants will find the economics that drove this shift in the past few years are becoming difficult to find in all but the most hard-hit submarkets in Houston.<\/p>\n

While we are likely to continue to see companies look over the fence to higher quality buildings as they near the end of their current lease commitments, tenants may be surprised to learn that landlords have seen the same economic indicators that signal \u201cgood times ahead\u201d and are unwilling to provide leasing concessions at the same level that they did two years ago.<\/p>\n

If you see change on the horizon for your organization, and an upgrade of your office space sounds appealing; you may want to reach out to your broker sooner rather than later to make sure your business objectives take the current, and upcoming, office market factors into account.<\/p>\n

About Lee & Associates – Houston<\/strong><\/span>
\nLee & Associates \u2013 Houston is a fully-integrated commercial real estate company with unrivaled capabilities and an unwavering dedication to integrity. Our business-minded brokers specialize in office, industrial and land real estate investments. As the fastest-growing broker-owned firm in the nation, with more than 57 office locations in North America, we are uniquely qualified to support our clients\u2019 real estate needs in the local, national and international markets. For more information, visit www.lee-associates.com\/houston\/<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Written by Rob Johnson, Principal at Lee & Associates – Houston Often referred to as moving-up, trading-up or flight to quality, many office tenants in Houston are taking advantage of the current market conditions to move into nicer office space. Some things change, and some things remain the same. Offices are generally located in areas convenient for the decision makers of the organization \u2013 this has not changed. What has changed is that offices are…<\/p>\n","protected":false},"author":38,"featured_media":2669,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[74],"yoast_head":"\nLee & Associates - Houston | Houston Office Tenants Want to Trade-Up<\/title>\n<meta name=\"description\" content=\"Written by Rob Johnson, Principal at Lee & Associates. 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