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by Lane Morgan, NAI Partners.

The rapid shift we are seeing in the Houston office market hit landlords (and developers) about as fast as Usain Bolt running the 100-meter world record sprint in the 2012 Summer Olympic Games. Bolt metaphorically had his cake and ate it too in 2012, proclaiming himself as “The Greatest Athlete to live.” As referenced in the title of this post, office tenants are doing the same right now while negotiating current lease renewals, expansions, downsizes and relocations. In a matter of two years those of us on the office tenant advisory side have witnessed many landlords leap out ahead in the race to compete during this downturn by offering very generous proposals (years of rental abatements, well-above-market tenant improvement allowances, creative “blend & extend” strategies, etc.) to steal tenants from other projects while other landlords perform about as well as I would in a race with Bolt.

“We are three years into a five-year lease and are too far away to discuss at this time.”

Wait Sir/Ma’am, is it too soon to discuss reducing your occupancy footprint to match this downturn and gain free rent now or extend your term at a below market rate?

The moral of the story is, if you are an office occupier in the Houston market, reach out to your commercial real estate agent (they should be already reaching out to you) and see what opportunities are out there for you to reduce your occupancy costs.

Now before the landlord agents write me down in their little black book, do not think for one minute I will forget 2013 and how hot the market was at that time—the table will soon turn and our metaphorical Usain Bolt will have blown out his ACL.

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