How Far Are Tenant Incentives Going?
In this tough economy, it’s not unusual to find commercial landlords willing to offer their tenants a month or two free rent, or to even pay for the build out of new space, to get the tenant to lease the space. But as office and retail vacancies rise, some leasing brokers are taking more creative measures.
For example, one Michigan broker, who is looking to fill space at a 22,000-square-foot office building that lost a major tenant, hosted an open house and raffled off a plasma television. In addition, brokers who attended the open house will receive a bonus of $500 for renting 4,000 square feet within four months, $1,000 for 8,000 square feet, and $2,000 for 12,000 square feet.
Even tenant incentives are getting bigger as landlords battle it out for tenants to lease their space. One realty firm was offering a year’s free rent on a six-year lease to any tenant who would lease all of the space in a vacant office building. The space was more than 33,000 square feet. Although there were no tenants willing to lease the entire building, the realty firm did find one tenant who was willing to lease one-third of the space for an incentive.