ORLANDO – Equity Investment Services, a boutique real estate investment advisory firm, has inked 16 leases in the last 60 days. The flurry of activity is notable, but perhaps more notable is the success of the firm’s aggressive strategy in a down market.
“Our approach is really proactive, and we track every deal that comes through,” Christopher Savino, managing director of Equity Investment Services, tells GlobeSt.com. “About half of these deals were done through either cold calling or going door to door. That’s the only strategy we’ve ever known.”
Of the 16 leases, 13 were new leases and three were lease renewals. The deals totaled more than 30,200 square feet of space. Notable leases include 3,000 square feet leased to Spin City at Skyview Plaza on Highway A1A, 2,600 square feet leased to a regional beauty supply chain located at South Trail Plaza, and 2,400 square feet leased to Kidz College on Old Winter Garden Road. Other notable tenant signings include Metro PCS, Edward Jones, and Travel Exclusive.
“Looking back to 2008 when the market fell apart, tenants took a wait and see attitude,” Savino says. “People are beginning to realize that this is the market we are going to operate in for the next few years. They are adapting to this marketplace and deciding to do business. Mom and pops, as well as national tenants, are looking to take advantage of lower rental rates and lock in long term deals.”
Rents continue to fall, although at a slower rate than at the start of this year, according to Marcus & Millichap. During the first half of 2010, asking rents decreased 1.3% to $17.13 per square foot. In the prior six months, asking rents slid 3.7%. Concessions rose from 14.6% of asking rents at the end of last year to 15.2% of asking rents in the second quarter. With tenants maintaining the upper hand in lease renewal negotiations, concessions will remain elevated through 2011.
“Hopefully we’ve seen a resetting of the market in terms of rental rates,” Savino says. “I think activity will pick up in 2011, and hopefully in 2012 we will see rental rates increase. The biggest impact on rental rates is going to be inflation. If we see massive inflation down the road, then certainly rental rates are going to increase.”