09/2002 Site Selection Trends: Truly a Tenant's Market? By Dees Stribling, Editor It’s a curious time to be a tenant looking for space in the Chicago area. Everyone knows that the market is soft. This is especially true in the suburbs . . . But does that mean it’s the best time ever to be a tenant? According to tenants and their representatives, the answer is only maybe. A tenant’s bargaining position in lease negotiation is still largely a function of its inherent business strength . . . . Good Deals Available, But... All together, the numbers only confirm that the market is soft, especially in the suburbs. There are certainly deals to be had, but pitfalls as well, particularly in regard to sublease space. “Tenants have read a lot about vacancies and subleases in the trade press and even in the newspapers, since that’s such an important characteristic of the market now,” says Wendy Spreenberg, principle at Site REsolutions Real Estate Consulting, a Chicago-based tenant rep and consulting firm. “But that doesn’t necessarily translate into an overwhelming advantage for a tenant. It depends on the tenant, and what the tenant can afford, and how viable the space is in the first place.” Spreenberg points out that big-name, large-space leasing in any part of the office market is relatively rare. “The bread and butter of office leasing is, and has always been, the mid-sized and smaller deals,” she says. “That world is populated by a wide variety of companies, some of whom pose a greater risk to landlords than others.” It’s a truism in the industry that tenants with good credit and solid financials will get the red-carpet treatment. They are the kind of tenants everyone wants. In the days of tighter leasing markets (say, 1999), that was very much the case. But the other side of the equation is that tenants with less-than-stellar credit can and do find space, even in tight markets – it’s just that they have less bargaining power, and so have to pay more for their space in one way or another . . . . Excerpt from Real Estate Chicago Magazine, September, 2002. Part of: