Alliance of Tenant Representatives

Inaugural Edition/Calibre Joins ATR!

Welcome to the inaugural edition of our newsletter. You're receiving this email because you are a friend, client or someone who has requested information from us. If you think you've received this email in error or do not wish to receive future emails from us, feel free to unsubscribe. Simply scroll to the bottom and follow the instructions.

We're expanding our commercial real estate brokerage capabilities. The Calibre Group, Inc. has been selected for membership by the Alliance of Tenant Representatives (ATR), an alliance of prominent, privately held commercial real estate brokerage firms in the U.S., Canada and Mexico. Like The Calibre Group, ATR's brokers are devoted exclusively to the representation of tenants and buyers of commercial real estate.

Should You Renegotiate Your Lease?

By John Reynolds, ATR member, CoRE Partners, Denver, Colo.

If your lease was negotiated in 1999, 2000 or 2001, the rent amount could be 20% or more above market. That's because vacancies have steadily climbed and lease rates have fallen significantly over the last three years.

There are absolutely some tremendous savings available to certain tenants through lease renegotiation, but it is not always the right strategy for every tenant. Factors to consider include:

• How much over market are you currently paying?
• How much time is remaining on your lease?
• Do you have a cancellation option?
• Have you had any operating expense escalations?
• Have your space needs changed?

Another thing to keep in mind is that while a renegotiation lowers rent, it generally extends the term of the lease. At the end of this extended term, you may find yourself significantly above market again if rates continue to soften.

So it is important to take a look ahead in your specific market. Where will it be when your current lease expires? Intelligent market projections, when analyzed with a tenant's current lease situation, will reveal when and if a tenant should consider a lease renegotiation.

Finally, if you anticipate potentially needing to upsize your space or relocate to a different part of town in the foreseeable future, it might not make sense to trade off a term increase for a rent reduction.

If you think you may be a candidate for renegotiation, your local ATR member would be happy to analyze your particular situation and make a recommendation.

CBD Rates Plunge, Vacancies Soar

CBD Office Statistics - Class "A" and "B" Source: CoStar Property

occupancy
Rentable Building Area: 39,433,239 sf
Vacant: 21%
Occupied: 79%
Leased: 84%

availability
Direct: 19%
Sublet: 3%
Total: 21%

leasing activity
Average Time: 16.8 Months
Leasing 2003: 3,788,411 sf 10%
Net Absorption 2003: (965,630 sf) (2%)

quoted gross rent
Office: $12.59-$33.38/yr

Greenway Tenants Take Advantage of Facts

Greenway Office Statistics - Class "A" and "B" Source: CoStar Property

occupancy
Rentable Building Area: 10,271,634 sf
Vacant: 16%
Occupied: 84%
Leased: 87%

availability
Direct: 14%
Sublet: 2%
Total: 16%

leasing activity
Average Time: 13.8 Months
Leasing 2003: 1,626,097 sf 16%
Net Absorption 2003: (366,842 sf) (4%)

quoted gross rent
Office: $15.00-$24.00/yr

Galleria Rising Vacancies Deflate Rents

Galleria Office Statistics - Class "A" and "B" Source: CoStar Property

occupancy
Rentable Building Area: 17,340,556 sf
Vacant: 22%
Occupied: 78%
Leased: 81%

availability
Direct: 25%
Sublet: 2%
Total: 27%

leasing activity
Average Time: 21.3 Months
Leasing 2003: 2,666,082 sf 15%
Net Absorption 2003: (246,122 sf) (1%)

quoted gross rent
Office: $13.50-$25.85/yr

The Leasing Institute - UT School of Law

Need continuing legal education credit? Plan to attend a premier two-day leasing conference sponsored by The University of Texas School of Law and hear The Calibre Group, Inc.'s Candace S. Baggett speak on subleasing.

For info, go to www.utcle.org.

April 1-2, 2004
InterContinental Hotel
Houston, Texas

April 29-30, 2004
Cityplace Hotel
Dallas, Texas

This newsletter was designed to comply with the rules and regulations of the Texas Real Estate Commission. The Calibre Group, Inc., Candace S. Baggett, Marian E. Livingston and Robert G. Sample are licensed as real estate brokers by The Texas Real Estate Commission.

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