For the taking: commercial space surplus creates business opportunities.

• Author: King, Heather L.
• Position: EntrepreneurEdg

There is a lot of bad news for small businesses these days. Credit is tight, cash is short and customers have stopped buying. But despite the gloom, there is still some great news out there--commercial real estate is very much a buyer's and leaser's market and that isn't going to change anytime soon.

Despite the fact that office space vacancy is at its highest level in Salt Lake County since 2004, landlords and sellers are willing to give more and take less. Whether buying or leasing, now is a great time for entrepreneurs to consider moving to a first "official office," upgrading to nicer offices or a better location, or renegotiating current leases. Darrell Tate, retail and land specialist for Commerce Real Estate Solutions says, "It's a very good time to be in the market and to be looking for space. You don't have the same competition for the same space which means you are able to negotiate a better deal for yourself."

Although market reports from CB Richard Ellis and Commerce Real Estate Solutions show lease rates around $20 to $21 per square foot, Dave Anderton, communications director with the Salt Lake Board of Realtors, explains that actual costs to business owners can be significantly lower because of the various concessions being offered by landlords who want to fill their spaces or keep current tenants in place.

Get Your Concessions Here

Lease incentives or concessions for the small business owner are now worth tens of thousands of dollars, if not more. From free rent to larger tenant improvement allowances, now is the time to negotiate (or renegotiate) the best least on any size or class of space.

"The most noticeable concession is free rent or rent abatement," Tate explains. "A year and a half ago we weren't seeing any free rent beyond the typical 60 to 90 days of no rent for the tenant to build out the space. Last year, the minute you opened your door for business you started paying rent. Now, in addition to a build-out period, we are seeing anywhere from four to six months of free rent on a five-year lease term."

Such concessions may help a fledgling business retain some of its much-needed capital to use during the very expensive business launch time-frame. "It's a nice cash flow management opportunity because that start-up capital and that start-up period is the most challenging time for entrepreneurs," says Tate.

In addition to monetary incentives, another emerging trend in commercial real estate is more flexible lease...