We were perusing the latest copy of the Korpacz Investor Survey to see what inducements are being offered nationally by landlords hoping to attract tenants.  It appears that some retail tenants are getting as much as a year free, with the average being in the neighborhood of four months.  This was not the case as recently as one year ago.  Strip shopping centers report that virtually all of them are potentially offering free rent, which is an eye opener on conditions.

 

The situation with respect to free rent being offered to office tenants is on a par with retail, although many were offering free rent last year.  The current average being offered is four months, with the number being slightly higher in cities as opposed to the suburbs.

 

Free rent in industrial space was also offered as an inducement last year. However, the percent of landlords offering it has increased.  In the case of warehouse space its availability has gone from 53% to 92% of landlords.  As with office space, the average number of months is about four.

 

With respect to apartments, close to 100% report offering free rent, with the average length of time being 2.1 months in the middle Atlantic states.

 

Landlords are also offering tenant improvement allowances that can range as high as two to three times the average.  Any inducement is on the table, from paying tenant’s moving costs to the occasional lease buyout.  We frequently hear anecdotal evidence from New Jersey landlords and tenants.  An appraiser who is attuned to the market can help advise you with respect to your particular situation. 

 

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