The need for commercial leases is growing. Demand for storage space is rising by 7% on average yearly. According to Statistica, the value of American commercial construction put in place tops $46.3 billion, with the transaction volumes in the national real estate market reaching $265 billion in 2012.
Office space is among the most highly sought after of commercial leases, with a total of 70.2 million square feet of office space being leased in 2014, the highest increase in demand since 2006. Leasing office space costs vary from city to city, with New York City fetching $153 per square foot in 2015 and Chicago just $68 per square foot. According to Knight Frank, Hong Kong has among the highest rental costs in the world, clocking in at over $255.50 per square foot for prime office space.
Warehousing and distribution are also in demand. The industry, which includes storage and warehouse leasing, is worth just over $26 billion and development of warehouses is on the rise. Speculative building, too, is increasing. Of the 59 million square feet under construction at the end of the third quarter of 2013, 62% was being erected without signed tenants.Over the next five years, construction of warehouse, storage and office space is likely to climb as online and offline retailers will require upwards of 25 million square meters of new space. Between 1990 and 2003, over four billion square feet of warehouse space, but new demand is likely to see even larger amounts of space being developed. This is good news for those who may be interested in finding a warehouse to rent in the near future.
Leasing commercial property, whether a retail space, warehouse or office space, makes sense as it allows for the flexibility of business which may need to expand or downsize quickly. It also means that move-in costs are lower and occupancy costs on the whole work out cheaper than in purchased premises. This makes it ideal for small businesses, in particular. To make best use of the flexibility of commercial leases, consider your renewal options when entering into an office lease agreement or any other type of commercial property contract. When choosing your initial warehouse, consider your growth needs and build in some extra space so that you do not have to think about upgrading too soon after leasing.