There was a time in the not too distant past when I
considered office properties “the best of all worlds.” They offered the
flexibility to create leases that were in between the detailed relationships
established by industrial and retail properties and the more straight-forward
residential lease. Rental calculations were relatively simple—base rent plus
utilities and any tenant improvement allowances. Occasionally, common area
improvements or maintenance factored into the equation. The property was
typically used from 7 am until 7 pm, so utilities were relatively low and
predictable. Wear and tear on the property was much less than any other real
estate property class.
The necessity of office space was at one point unquestioned and tenants were readily available. Space considerations were for the most part limited to whether the location was large enough and had enough amenities or services to meet the tenants needs. Leases were easy to enter, easy to renew and easy to understand. For owners, office properties offered many of the benefits of owning a commercial property with fewer of the complexities that come with other property types.
