Flexibility Yields Profitability in Commercial Real Estate Market
Memphis, TN – The Memphis commercial real estate market is bracing itself for a potentially rough first quarter in 2009. At the end of 2008, vacancies had risen 15.8 percent, and the rate is likely to rise higher as many office leases begin to expire in 2009. Large companies are looking for ways to trim expenses and downsizing may become a more common occurrence.
Small-business owners are also taking a closer look at rental needs. Many are hesitating to lock-in to long-term leases. Others are placing plans for expansion on hold. However, amid rising vacancy rates, there are commercial landlords looking for creative and mutually beneficial solutions to the problem.
John Vanhara, President of Memphis-based Ofiplex is one such example. In 2005, Vanhara bought a 17,000 square foot commercial building at 3155 Hickory Hill, just minutes from Highway 385. At the time of purchase, the building had lost all but one tenant. Seeing an opportunity to target businesses needing smaller, more manageable spaces, he divided the building into 59 individual offices.
Vanhara went one-step further and provided business owners with even greater flexibility. Gone were the standard multiyear leases. Tenants could choose from several leasing packages, including a simple month-to-month plan. Shared amenities such as free Internet and fax services were also made available to tenants.
Today, Ofiplex boasts an extremely low vacancy rate. Vanhara attributes the success to his approach. “The downturn in the economy demands that as property owners we learn how to stay flexible and open in our approach to meeting the needs of businesses, particularly small businesses,” he says.
“Businesses are carefully reviewing plans and budgets closely, looking for ways to get the most benefit for dollars spent. As a landlord, you have to be willing to quickly respond to the needs of your tenants. Your ability to do so not only creates a mutually beneficial situation but a more profitable one for all involved.”
For more information about the Ofiplex success story or rental packages available, contact John Vanhara.
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