Recent events in the financial markets have seen even the most seasoned companies pitch into chaos. The instincts of those less-affected companies are simply to hunker down and try to minimize the worst effects of the turmoil. However, in chaos lies opportunity. Simply put, smart moves in tight times will payoff for companies in the future as the economy eventually starts to improve. It is all about positioning and seizing opportunities that do not exist in more robust markets. This is particularly so for commercial office tenants.
Credit. It is something that, until recently, had been available and plentiful. As this is no longer the case, many commercial office tenants are suffering from the effect of a tightening credit market. For example, tenants who have recently leased space may be unable to obtain the loans necessary to complete a build out and furnish a space, often resulting in self-financing or even subleasing of space. Likewise, nervous landlords are demanding as many as five years of perfect credit and excessive security deposits before leasing space to tenants. It is clear that landlords no longer intend to act as a lender as they have in the past, at least not in the near term. Troubling events for sure, however rather than hunker down, now is the time for tenants to look at the advantages that they do have in this market and then execute the right moves.
Furnishing a space is also becoming more difficult in this tight market. Getting the credit to furnish a space is one thing, but even those tenants seeking to lease furniture are finding that substantial security is required, even personal guarantees. It may therefore be the time to look into the burgeoning refurbished furniture industry.
It is also prudent for tenants to think about greening existing operations as well as doing green fit outs. Again, this is all about efficient business operations. It will save money. It will save energy. It will help save our climate. Simply, in these times, green smart is business smart. So, while the markets remain depressed, a key question for a company must now be: Given our current leasing situation, what are the smart moves in these down times that will maximize the opportunities now available?
