Also if they give it by industry.
Most areas have a broker who specializes in leasing out commercial space. He can tell you what the square footage rate is for the area.
He can also give you an idea of how much over-supply there is and how long it might take to lease a place out.
If you can’t find him any other way, he will have signs on vacant commercial buildings and brand new comercial developments.
real estate brokers, appraisers, online listings (loopnet, local mls), “commercial for rent” classifieds in local paper, other investors, check with local city or county for property market studies, there are also websites like Costar that charge for comps, or you actually call property owners to get rents which sounds like a pain but you can get alot of good information on the local market
at least once a week I’ll get on loopnet and my local mls website to check for new listings, many times the brokers will list some kind of rental info if the property is leased, I’ll print those listings and categorize them by property type, it’s a great and easy way to get free rent comps
there aren’t too many other ways to get rent comps
As rents vary from area to area, I find properties for rent simular to the one I am looking to rent and call the leaseing agent/s (usually phone number on building or plaque). Then compare their property with mine and come up with a fairly competitive price. Also if there isn’t simulare property call the local chamber of commericer, they always have someone who knows what commercial space is going for in their area.
Good Luck
Paul
Shouldn’t you be checking for properties that actually rented in the recent past? Similarly to when you are checking for comps when you buy a property, you shouldn’t be using houses for sale… You should be using houses that actually sold over the past few months… Any thoughts?
Seems more logical with your approach of checking something actually rented since comm. buildings can remain vacant for a VERY long time.
Generally speaking, commercial properties tend to lease at a rate very close to the asking rate. Only in situations where the property has sat vacant for a very long time will the owner decide to drop the asking rent. Property owners want rents to increase in their local market, so it’s not cool to be the guy asking for below market rents. Yes, it is ideal to have rent comps with actual signed leases, but if the property is in an area with a relatively stable market you can assume asking rents are close to actual market rates. While commercial properties can have vacancies that last several months, they also have signed leases that typically last at least 3 -5 years and longer. Can’t have your cake and eat it to.
Artyman - I don’t have any experience with commercial… However the above statement doesn’t make sense to me… If landlords usually get very close to what they ask, it means to me that either the landlords are not asking the maximum they can, or the tenants are not trying to get the best deal they can. And I believe both the landlords and tenants are trying to ge the best deals they can - so a typical landlord will ask the maximum and a typical tenant will negotiate the price down - in the end of the day they will probaly meet somewhere in the middle… Am I missing something here?
Thank you.
Ultimately, it’s all about supply and demand. You can’t ask for more than the market will pay and you don’t want to ask for less. That’s why I said my comments are based on a stable market with adequate demand. If a centralized commercial market area is absorbing vacancies within a reasonable time frame you won’t see owners getting desparate. If I’m agreeing to a lease term of 3-5 years or longer you can bet I’ll hold out another month or two to get $10/S.F. instead of $8/S.F. The difference in $1/S.F. for a 20,000 S.F. building can be huge, like $20,000 huge. So you have to be very careful when setting your asking rate.
It works similar in the residential market. I’ve rarely accepted less than my asking rent and I certainly don’t meet renters in the middle. The demand for your rentable space plays a huge part in setting your rate. If you set your asking rate properly you’ll eventually find a renter.
Everything I said can change if your property is in a suffering market and has sat vacant for a longer than average period of time. Not enough demand means the asking rent goes down and the owner becomes very negotiable.
Artyman - interesting perspective. Thank you for sharing. have a good evening!
contact a reputable firm like marcus and millichap for current market rent info by property type. They also have market trend reports that will give you a better idea of how the market is responding to the absorption