Crossed 40% vacancy in my building, that number made me panic

I manage a small office property near the Tech Center, about 65,000 square feet total. Last month I ran the numbers for our quarterly report and saw we hit 41% vacancy. That was the first time we crossed the 40% mark since I took over in 2019. It hit me different because I had been telling myself the market was just slow, but 40% is a line that changes how lenders look at you and how tenants negotiate. Our biggest remaining lease expires in March and the company already told us they are shopping around for cheaper space in Lakewood. I am now trying to figure out if we should drop rates by $2 a foot or hold firm and risk another empty floor. Has anyone else hit that 40% vacancy wall, and what did you do about it that actually worked?

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abby_wilson5112d ago

Lowering rates now is basically telling your remaining tenants that YOU are desperate, which actually makes them MORE likely to shop around because they'll think the building is dying. Your real problem isn't the rate, it's the STORY you're telling the market, and a cheap story is the same as a cheap building. Hold the line at the current price, put that energy into a new paint job and a better lobby, and let the empty space look like a choice instead of a failure.