How to Capture Small Tenants
With big office leases few and far between, office developers are scrambling to fill up their rent rolls with smaller deals. But the big, glassy office jewels that have popped up over the past few years aren't the only option for tenants with small square footage requirements, says Stream Realty Partners' Kyle Luby. Boutique older office buildings with small floor plates are an attractive alternative to newer, pricier digs where a small tenant may only find space in the back corner of a building without much of a view. And as appetites for new space in the smaller tenant sector grows, owners have to be more flexible at the negotiating table to succeed. That means shorter terms and being more open during the design process, he adds. "What landlords need to be doing to capture that demand is to be the path of least resistance."
Kyle tells us Stream has just picked up the listing on 1432 K St overlooking McPherson Square, a boutique 33k SF property with 2,700 SF floor plates. The smaller floor area allows tenants views of K Street and the square they may not get on a bigger plate, as well as a historic (the building dates back to 1917) urban design that's in limited supply downtown. Smaller lobbying, government affairs, design, and law firms are the likely target tenants for a boutique building like 1432 K, Kyle says, and that it's also an option for growing tenants looking to migrate downtown from smaller submarkets.