CHICAGO — Ongoing softness in the commercial real-estate market is making it a great time to sign or renegotiate a lease, say almost half (46.4%) of drycleaners responding to the most recent Wire survey. And more than a quarter (27.6%) of respondents say they’re looking to do just that.
Asked, “What describes the conditions in your area?” when it comes to commercial real-estate sales and leasing, 46.4% answered “It’s a good time to sign/renegotiate a lease.” Only 7.1% said “It’s a good time to buy,” but one-quarter (25.0%) said “It’s a good time to buy or lease,” and 21.4% said “Neither option is favorable right now.”
“Some landlords are starting to see the light and lower their rents just to fill the spaces,” said one operator. “But too many are holding out for enough to cover their mortgage payments, and they’re just not going to get it because of all the empty commercial space available.” “Commercial properties are still priced way too high because owners are upside-down on their mortgages,” another said.
Asked to describe their own situations in commercial real estate, more than a quarter (27.6%) of respondents said, “I’m looking to sign/renegotiate a lease.” While no one was looking only to buy, 13.8% said “I’m looking to buy and/or lease locations.” About one in five drycleaners is looking to shed property, with 3.4% looking to sell and 17.3% trying “to end leases and close locations.”
With interest rates at historic lows, one operator suggested refinancing as a favorable strategy for property owners with cash-on-hand. “This is a terrific time to refinance as long as you don’t need any take-out money,” he said. “Remember, the devil is in the details. As long as you don’t need the money, you can get it.”
The largest percentage of respondents (37.9%) say that their commercial real-estate needs are satisfied for the time being, however. “We are fortunate in the respect that we own our buildings and land at both full-service locations,” one operator said. “They are also located in upscale districts. If we do sell at some point, we should get a good dollar amount.”
While American Drycleaner's Wire survey presents a snapshot of the audience’s viewpoints at a particular moment, it should not be considered scientific. Subscribers to Wire e-mails—distributed weekly—are invited to participate in an industry survey each month. The survey is conducted online via a partner website, and is developed so it can be completed in less than 10 minutes. The entire American Drycleaner audience is encouraged to participate, as a greater number of responses will help to better define operator opinions and industry trends.
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