The market for nonresidential properties appears to be relatively robust in Southern California. This is evidenced by the fact that the renters of large office spaces in Orange County and Los Angeles are jumping on their lease renewals early. Research shows that office tenants that are occupying at least 75,000 square feet of properties featuring commercial leases are renewing their leases 22 months ahead of time on average.
This trend has been going on since 2012. By renewing their leases 22 months early, tenants can make the most expedient economic decisions for themselves and weigh increasing rents. They usually need a lot of lead time for finding new locations if their current spaces’ physical attributes or economics no longer work for them. In addition, if tenants need large blocks, this can be hard to find or take landlords a while to assemble.
However, smaller tenants — those occupying under 75,000 square feet — are not renewing their leases as quickly. Still, the cost of renewing a lease is typically a lot lower than relocating to a new space, which is why lease renewals are so popular among tenants. Recent research showed that all in all, commercial renters are leasing about 135,000 square feet on average and that their lease terms are 101 months on average. An increasing number of these spaces are being used as co-working spaces, with Los Angeles being the nation’s second-biggest co-working market.
Leasing commercial spaces can be both exhilarating and intimidating for business owners in Los Angeles due to the stiff competition that exists in this area of California. However, an attorney can provide aspiring tenants with the guidance they need to secure the best commercial leases for their needs. This includes reviewing a lease agreement and negotiating it before a business owner signs on the dotted line.