The simple answer is Yes! This is because small tenants are the lifeblood of the San Diego commercial real estate market. Why is this? If you look at the graph below, you can see that 54% of tenants are renting less than 2,500 square feet of office space. So how much is 2,500 square feet? An afterthought to most brokers. But if you continue to look at the graph you can see that an additional 19% of tenants rent space that’s between 2,500 and 5,000 square feet. So what does 5,000 sqft mean in the world of commercial real estate? To most brokers, again not much. 5,000 square feet is not exactly a Qualcomm caliber tenant that will be featured in the San Diego Business journal when they sign a new lease. But this size tenant has to matter to someone right? Well if you do the math, tenants with less than 5,000 square feet account for 73% of the total market. This is no small piece of the pie by anyone’s standards, but these deals matter the most to landlords and the banks that help finance them. While many brokers are not interested in deals this size, the banks and landlords live and die on the income generated by these tenants. When you help to account for 73% of the market, even if it seems your landlord or broker doesn’t want to deal with you, your requirement is very important to the health of the San Diego real estate market and economy as whole.
So now that we have established that you absolutely do matter, what should you expect? You should expect to be taken seriously by your landlord because small tenants as a whole make up a significant portion of almost any landlords income. When negotiating with your landlord it is essential to know how valuable you are to them in order to get yourself the best deal. That is why at Synergy, we submit multiple proposals for you to leverage landlords against each other, and get them to realize just how valuable you are to them.
Another aspect that small tenants often overlook, is that they don’t often share a building with much larger tenants. It wouldn’t make sense to divide up a 50,000 square foot floor with one large tenant occupying 48,000 sqft of it and a small tenant the other 2,000. Large corporate tenants often take up entire floors if not entire buildings, which results in these buildings not being suited for small tenants as well. However, if you performed a survey of buildings in San Diego, you would find that there are may more buildings set up for and catering to small tenants than large corporate ones. Landlords in these buildings spend almost all their time working with small tenants like you, so to them you certainly to matter. So don’t be afraid to do your homework and ask for a fair deal, because your landlord cannot afford to lose you.