As Market Heals, Tower Owners Toughen Up
Corporate tenants have been scrambling to take advantage of low rents while they can.
A popular tactic has been to strike early and hard and wring an advantageous lease renewal from a skittish landlord.
But with the market picking up, tower and building owners in Greater Boston are no longer so eager just to cut a deal in order to lock a tenant in place at a below market rent, Jones Lang LaSalle reports.
“Recently landlords have become bullish on the future, and in some cases are now resistant to negotiations with tenants well in advance of lease expirations,” the real estate firm reports in a national “office occupier” report.
And there are other signs that landlords are regaining their balance as well. While free rent is still being offered, the amount went down last year for the first time in three years.
Tenant improvement allowances also dropped, albeit by a modest 3.3 percent, in the last few quarters of 2010, Jones Lang LaSalle finds.
Basically, the real estate gravy train for corporate tenants is reaching the end of the line.